Temasek Holdings vows to take “collective accountability” for its $275M investment loss in the defunct FTX cryptocurrency exchange, as a sovereign wealth fund of Singapore.
Temasek, the second-largest external investor in FTX with 7 million shares, faced scrutiny as the exchange’s collapse prompted questions about its investment choices.
In a Monday statement, Temasek disclosed the existence of fraudulent conduct deliberately concealed from investors, including Temasek itself, emphasizing the need for transparency and investor protection.
In the FTX’s collapse, Temasek promptly recognized a complete write-off of its investment totaling $275 million. The acquisition consisted of $210 million (1% stake) in FTX International and $65 million (1.5% stake) in FTX.US, accounting for a mere 0.09% of Temasek’s overall net portfolio value of $293.5 billion (SGD 403 billion) from the previous year.
Temasek conducted extensive due diligence for eight months before investing in FTX, including a review of financial statements, regulatory risks, and cybersecurity. Following the FTX incident, Temasek plans to enhance its investment appraisal process, particularly for fast-growing companies, while reaffirming its cautious approach to the blockchain sector.
Notably, FTX was the sole crypto exchange investment held by Temasek, and during its peak, it served users in Singapore, unlike its competitor Binance, which faced restrictions.
Temasek’s experience with the collapse of FTX highlights the challenges and risks associated with investments in the volatile cryptocurrency space. It serves as a reminder of the importance of thorough due diligence and cautious decision-making, even for established institutional investors.
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