Digital Assets: Fairfax County Retirement Systems To Invest In Crypto Lending

August 4, 2022 | Digital Assets, Latest News, News
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Crypto lending, or “yield farming” could boost returns at the Fund despite recent debacles such as at Celsius Network.

The $6.8 billion Fairfax County Retirement Systems has been cleared by its trustees to commence a kind of investment known as “yield farming,” where the investor owning crypto tokens can lend them out and earn an income stream from them. (FT)

The decision by the fund comes after the crypto market has been rocked by failures of the stablecoin Terra, liquidation of hedge fund Three Arrows Capital, and crypto platforms Celsius Network and Voyager Digital (TSE: VOYG). Doubtless, Fairfax is looking to fill a void in this market, as investors have withdrawn their financing given the current risks.

“Some of the yields 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,” Katherine Molnar, chief investment officer of the Fairfax County Police Officers Retirement System, said in an interview with FT.

Recently, Fairfax made two $35 million investments in multi-strategy digital asset investment firm Parataxis Capital and the VanEck New Income Fund.

“For those that are still willing to provide liquidity, decent profit seekers, they’re actually able to earn more attractive yields at the moment,” Molnar added.

However, investing in digital assets by the $5bn Fairfax County Employee Retirement System and the $1.8bn Fairfax County Police Officers Retirement System goes as far back as 2019, when the funds invested $10 million and $11 million, respectively, into the Morgan Creek Blockchain Opportunities Fund.

That initial investment later blossomed into further allocations by the two funds, covering private equity, hedge funds and now yield-farming strategies.

According to Molnar, though these investments had been impacted by the crypto downturn, they would still be up 350%.

Related Story: Celsius Goes Under Too, Files For Bankruptcy

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