Virginia Pension Fund Investing in Crypto Despite Asset Price Crash: FT

  • A pension fund in Virginia gained approval to invest in crypto lending to grow portfolio returns, according to the Financial Times.
  • The Fairfax County fund is will allocate capital for crypto yield farming despite the collapse of prices in the sector this year. 
  • Yield farming involves staking cryptos for a fixed period in exchange for interest payments. 

A Virginia pension fund with $6.8 billion under management gained approval from its board of trustees Friday to invest funds in cryptocurrency yield farming, according to a Financial Times report.

The Fairfax County Retirement Systems first announced plans to explore yield farming in May. The fund is made up of the Fairfax County Employee Retirement System and Fairfax County Police Officers Retirement System. 

Crypto yield farming encompasses lending out tokens in exchange for interest payments. The move further into crypto lending for the pension fund comes even as the sector has collapsed this year, most notably with the fall of stablecoin Terra USD, which was a popular vehicle for investor staking. 

The Fairfax fund has already been investing in crypto, with an initial combined allocation of $21 million between the employee and police pensions toward Morgan Creek Blockchain Opportunities Fund in 2019. Fairfax County Police Officers Retirement System’s chief investment officer Katherine Molnar told the Financial Times that the investments are timely given “that you’re able to achieve in a yield farming strategy are really attractive because some of the people have stepped back from that space.” 

The collapse of crypto lending has extended to large firms this year, with companies like Three Arrows Capital and Celsius Network collapsing into bankruptcy thanks to heavy losses from investors staking their tokens. 

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