Temasek to write down US$275 million investment in cryptocurrency exchange FTX

SINGAPORE: Temasek Holdings on Thursday (Nov 17) said that it will write down its US$275 million (S$376.8 million) investment in FTX, irrespective of the outcome of the cryptocurrency exchange’s bankruptcy protection filing.

Temasek’s announcement comes after FTX collapsed last week, sending shockwaves through the cryptocurrency industry.

In a statement published on its website, Temasek said that it invested US$210 million in FTX International for a minority stake of about 1 per cent, and US$65 million for a minority stake of about 1.5 per cent in FTX US. This was across two funding rounds from October 2021 to January this year.

The cost of Temasek’s investment in FTX was 0.09 per cent of its net portfolio value of S$403 billion as of Mar 31, 2022, the Singapore state investment firm said.

“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,” Temasek said in its statement.

“There are inherent risks whenever we invest, divest or hold our assets, and wherever we operate. While this write down of our investment in FTX will not have significant impact on our overall performance, we treat any investment losses seriously and there will be learnings for us from this.

“We will continue to remain prudent and exercise caution even as we explore opportunities that are aligned with our structural trends, to deliver sustainable returns over the long term for our overall portfolio.”

It added that there have been “misperceptions” about its investment in FTX as an investment into cryptocurrencies. 

“To clarify, we currently have no direct exposure to cryptocurrencies,” said Temasek.

The state investment firm also addressed its assessment of FTX CEO Sam Bankman-Fried.

“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,” the firm said.

“We expect companies that we invest in to comply with their obligations under the laws and regulations of jurisdictions in which they have investments or operations; abide by sound corporate governance; and above all act ethically always.”