Like the recent collapse of major exchange FTX continues to ravage crypto markets across the world, Singaporean public fund Temasek has decided to write off the $275 million investment made in the failing crypto exchange.
“We invested $210 million for a c. 1% minority stake in FTX International, and invested $65 million for a c. 1.5% minority stake in FTX US, over two October funding rounds. 2021 to January 2022,” Temasek said in a statement. “Given FTX’s financial condition, we have decided to write down our entire investment in FTX regardless of the outcome of FTX’s bankruptcy protection filing.”
“We believe that trade is a key element of global financial systems. The thesis of our investment in FTX was to invest in a leading digital asset exchange providing us with protocol-agnostic and market-neutral exposure to the crypto markets with a fee income model and no trading risk or balance sheet”, according to the Singaporean entity.
Temasek says the fund’s investment portfolio is worth up to 403 billion Singapore dollars ($293.5 billion), meaning the latest development is unlikely to have a major impact on its business.
“The cost of our investment in FTX was 0.09% of our portfolio net worth of S$403 billion as of March 31, 2022,” the statement said.
At the same time, Temasek said his investment in FTX was not part of a larger strategy to expand the fund’s exposure to crypto.
“There have been misperceptions that our investment in FTX is an investment in cryptocurrencies. To clarify, we currently have no direct exposure to cryptocurrencies,” the entity said.
Temasek also said that, as with his other investments, “we conducted an extensive due diligence process on FTX, which took approximately 8 months from February to October 2021. During this time, we reviewed the audited financial statements of FTX , which have shown to be profitable.”
That said, the Singaporean entity has admitted that its decision to entrust the fund’s money to a company run by Sam Bankman-Fried was not based on a proper assessment of the motivations behind the FTX founder.
“It is apparent from this investment that perhaps our belief in the actions, judgment and leadership of Sam Bankman-Fried, formed from our interactions with him and the opinions expressed in our discussions with others, appears to have been misplaced. “, said Temasek. .