Singapore's Investment Conglomerate Temasek Drops Crypto Investment Plans Citing Regulatory Uncertainties
Singaporean investment conglomerate Temasek has decided to drop its plans to invest in crypto exchanges, due to regulatory uncertainties.
In an interview with CNBC, Temasek’s Chief Investment Officer Rohit Sipahimalani revealed the bitter experience of writing down its entire $275 million investment in the now-bankrupt crypto exchange FTX.
As a result, and with unclear regulations and market conditions, Temasek is not currently looking to invest in crypto-related firms, he said.
“There’s a lot of regulatory uncertainty in this environment. And I do think that be very difficult for us to make another investment and exchange in the middle of all this regulatory uncertainty.”
His remarks come as the US SEC continues to crack down and take legal measures against major crypto firms including Binance and Coinbase. “Given the way things are right now,” Sipahimalani noted that the company isn’t comfortable investing in exchanges.
Temasek has refrained from investing directly in cryptocurrencies for a long time. Alternatively, the firm decided to back crypto service providers. However, its unsuccessful investments in now-defunct FTX, have ruined the reputation of the Singapore state-owned investor.
Sipahimalani explained that FTX investment was a part of Temasek’s early strategy, where the company recognized “new disruptive technologies to see what’s around the corner.”
"We invested in FTX because at that time it seemed like the company [had] good technology, [and] it was gaining market share,” he added. “Clearly there has been a situation of fraud there we are very disappointed about.”
He further said that the company has learned from the experience, but investing in crypto firms will involve some level of risk, a Nikkei report noted.
“It's impossible to always discover fraud no matter how much due diligence that we do.”
However, Temasek was not completely against investing in crypto-related firms. He said, “if you have the right regulatory framework, and we are comfortable with it, and you have the right investment opportunity, there’s no reason for us to not to look at it.”
Temasek on July 11, posted its worst returns in seven years, driven by factors including macroeconomic and geopolitical challenges.