Singapore Government's Temasek Writes Down $275 Million Investment in FTX

Temasek Holdings, the investment firm owned by Singapore's government, announced that it will write down its $275 million investment in the now collapsed FTX.

The firm had invested $210 million in Sam Bankman-Fried's crypto exchange for a minority stake of about 1 percent in FTX International and 1.5 percent, worth $65 million, in FTX US. Temasek had attained this through two funding rounds from October 2021 to January 2022.

The cost of Temasek's investment in FTX, as of March 31, 2022, was 0.09 percent of its net portfolio value of $403 billion. In an official statement, the Singapore state firm said it has decided to write down its full investment in FTX in view of the crypto exchange's financial position, irrespective of the outcome of FTX's bankruptcy protection filing.

"There are inherent risks whenever we invest, divest or hold our assets, and wherever we operate. While this write down of our investment in FTX will not have significant impact on our overall performance, we treat any investment losses seriously and there will be learnings from us from this," the statement said.

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Temasek will remain prudent and exercise caution even as it explores opportunities that are aligned with the company's structural trends, to deliver sustainable returns over the long term for their overall portfolio. The Singapore state company also addressed the "misperceptions about its investment in FTX as an investment into cryptocurrencies. "To clarify, we currently have no direct exposure to cryptocurrencies."

The firm shared that perhaps its belief in the actions, judgement and leadership of Sam Bankman-Fried, formed from Temasek's interactions with him and views expressed in their discussions with others, would appear to have been misplaced. Temasek expects companies that it invests in to comply with their obligations under the law and regulations of jurisdictions in which they have investments or operations, abide by sound corporate governments, and act ethically always.

Sam Bankman-Fried
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Moreover, Temasek is supportive of the efforts of the regulators and the courts. It encouraged the principals involved with FTX to cooperate for an orderly resolution of outstanding matters. Despite the collapse of Sam Bankman-Fried's company, Temasek belief in blockchain is unmoved. The Singapore firm described blockchain technology as enablers with the potential to transform sectors and create a more connected world. It said the nascency of the blockchain and digital asset industry presents innumerable opportunities as well as significant risks.

Temasek closely tracks the risks involved and has also taken a calibrated two-pronged approach to exposure in this space through venture building and investing.

This article was first published on November 17, 2022
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