Singapore State Fund Temasek Writes Down $275 Million Investment in FTX – Here’s What Happened

Jaroslaw Adamowski

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June 26, 2023

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As the recent collapse of major exchange FTX continues to ravage the crypto markets across the world, Singapore’s state-run fund Temasek has decided to write down the $275 million investment made into the failed crypto exchange.

“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 two funding rounds from October 2021 to January 2022,” Temasek said in a statement. “In view of FTX’s financial position, we have decided to write down our full investment in FTX, irrespective of the outcome of FTX’s bankruptcy protection filing.”

“We believe that exchanges form a key part of global financial systems. The thesis for our investment in FTX was to invest in a leading digital asset exchange providing us with protocol agnostic and market neutral exposure to crypto markets with a fee income model and no trading or balance sheet risk,” according to the Singaporean entity. 

Temasek says the fund’s portfolio of investments is worth as much as S$403 billion ($293.5 billion), which means that the latest development is unlikely to exert a major impact on its activities. 

“The cost of our investment in FTX was 0.09% of our net portfolio value of S$403 billion as of 31 March 2022,” according to the statement. 

At the same time, Temasek said its 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 into cryptocurrencies. To clarify, we currently have no direct exposure to cryptocurrencies,” the entity said. 

Temasek also declared that similarly to its 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 FTX’s audited financial statement, which showed it to be profitable.”

This said the Singaporean entity admitted that its decision to trust the fund’s money to a company run by Sam Bankman-Fried was not based on a correct evaluation of the motives that were driving FTX’s 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 views expressed in our discussions with others, would appear to have been misplaced,” Temasek stated.