Singapore : Temasek Adopts Cautious Approach in Crypto Space Following FTX Incident

Singapore

In November, Temasek made a decision to completely write off its investment in FTX.

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Singapore’s sovereign wealth fund, Temasek Holdings, has acknowledged its responsibility and committed to taking “collective accountability” for its unsuccessful $275 million investment in the now-defunct crypto exchange FTX.

In a statement issued on Monday morning, Temasek stated that there was fraudulent activity deliberately concealed from investors, including Temasek itself.

Temasek Chairman Lim Boon Heng expressed that while there was no wrongdoing on the part of the investment team in their recommendation, both the investment team and senior management, who hold ultimate responsibility for investment decisions, took shared accountability and faced compensation reductions. This statement was posted on Temasek’s website.

Shortly after the collapse of FTX in November, Temasek announced that it had completely written off its investment in the company. The investment amounted to $210 million, representing 1% of FTX International, and $65 million, accounting for 1.5% of FTX.US. These figures represented approximately 0.09% of Temasek’s net portfolio value, which amounted to $293.5 billion (SGD 403 billion) from the previous year.

During that period, Temasek stated that it conducted an extensive eight-month due diligence process on FTX. This involved reviewing the company’s audited financial statements, assessing regulatory risks, and analyzing cybersecurity threats. In the aftermath of the FTX incident, Temasek expressed its intention to enhance its investment appraisal procedure, particularly for rapidly expanding firms.

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Temasek emphasized its stance of not intending to invest in cryptocurrencies and reiterated its cautious approach towards new investments in the blockchain sector.

FTX was the sole investment Temasek had made in a cryptocurrency exchange. During FTX’s peak period, users located in Singapore were able to access the platform, whereas its main competitor, Binance, was not accessible to them.

In September 2021, the Monetary Authority of Singapore (MAS) included Binance on its Investor Alert List, but did not take similar action against FTX. MAS clarified that the reason for this distinction was that Binance actively solicited customers from Singapore and facilitated trades in Singapore dollars, whereas FTX did not engage in such practices.

Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.

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  • Asad

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