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Singapore’s Temasek writes off $275 million FTX investment

By:
on Nov 17, 2022
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  • Singapore's Temasek writes off entire investment in collapse crypto firm FTX.
  • The state-owned holding company had put $275 million in FTX and FTX US, which filed for bankruptcy last week.
  • Despite the disappointing turn of events, Temasek says its part of investing risks and a lesson learned.

Crypto news about FTX continue to dominate headlines, with the latest being from Temasek, a Singaporean sovereign wealth fund that says it’s written off its entire investment in bankrupt crypto exchange.

The state-owned holding company, which announced this on Thursday, noted that the exposure to FTX via the investment accounted for a negligible percentage of its portfolio.

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According to Temasek, the company first invested $210 million in FTX to acquire a minority stake of about 1% in the digital asset platform. The fund also invested $65 million for a 1.5% stake in FTX US, with the investment made across two funding rounds between October 2021 and January 2022.

Temasek’s statement reads in part:

“We invested US$210 million for a minority stake of ~1% in FTX International, and invested US$65 million for a minority stake of ~1.5% in FTX US, across 2 funding rounds from October 2021 to January 2022. The cost of our investment in FTX was 0.09% of our net portfolio value of S$403 billion as of 31 March 2022.”

Temasek had ‘misplaced’ belief in SBF

FTX filed for bankruptcy protection on 11 November 2022, with shady deals between the crypto exchange and its affiliate trading firm Alameda Research leaving Sam Bankman-Fried’s companies with a multi-billion dollar hole in its balance sheet.

The developments have seen several other companies fall into distress, while court filings have shown there could be over one million creditors. Regulators across the US, including the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC) and Justice Department are all investigating FTX’s implosion.

Temasek, as reported here, was among investors in FTX’s funding round that valued tha crypto exchange at $32 billion earlier in the year. In its statement on Thursday, Temasek explained it had conducted due diligence on FTX for almost eight months before investing in FTX. The process had shown the crypto exchange “to be profitable.”

Although things have turned out differently, the failed investment presents a lesson, the company explained.

According to the Singaporean investment firm, it’s apparent their belief in FTX founder Bankman-Fried was misplaced. Temasek, which has divested over $37 billion and invested over $61 billion this year, says it still recognises how important blockchain applications and decentralised technologies are in the transformation of key global sectors.

However, it does not invest in specific cryptocurrencies and has no direct exposure to such assets.

“There have been misperceptions that our investment in FTX is an investment into cryptocurrencies. To clarify, we currently have no direct exposure in cryptocurrencies.”