May 31, 2023
By Sharan Kaur Phillora
Temasek Holdings, a sovereign wealth fund in Singapore, has made a commitment to assume responsibility for its unfortunate $275 million investment in the collapsed cryptocurrency exchange, FTX. In an official statement released on Monday, the fund acknowledged that there had been fraudulent activities purposefully concealed from investors, including Temasek itself.
Here’s what we know:
The Chairman of Temasek, Lim Boon Heng, expressed that although the investment team had not engaged in any misconduct while making their investment recommendation, they and the senior management, who bear ultimate responsibility for investment decisions, have taken collective accountability and faced a reduction in compensation.
Shortly after FTX’s collapse in November, Temasek announced that it had written off the entire investment. Initially, the fund had invested $210 million, accounting for 1% of FTX International, and an additional $65 million, representing 1.5% of FTX.US. These figures amounted to 0.09% of Temasek’s net portfolio value, which stood at $293.5 billion (SGD 403 billion) last year.
At the time, Temasek claimed to have conducted eight months of thorough due diligence on FTX, including reviewing audited financial statements, assessing regulatory risks, and analyzing cybersecurity threats. Following the collapse of FTX, Temasek has expressed its intention to refine its investment appraisal procedures, particularly for rapidly growing companies.
The company also said it has cut the pay of senior management and the investment team involved in the decision to invest in the now-bankrupt FTX cryptocurrency exchange.
Temasek reiterated that it has no plans to invest in cryptocurrencies in the future and will exercise caution when considering new investments in the blockchain sector.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.