The prime minister of Singapore and the ruling administration are under fire following the fall of the bankrupt cryptocurrency exchange FTX.
The now-bankrupt cryptocurrency exchange FTX demise has put Singapore’s prime minister and the ruling administration under fire. In light of their inability to safeguard retail investors, Prime Minister Lee Hsien Loong and Deputy Prime Minister Lawrence Wong will be grilled. 15 inquiries were made by the Workers’ Party of Parliament (MP) over Temasek’s involvement and the demise of FTX.
The reliability of the government in monitoring Temasek and Singapore’s GIC sovereign wealth fund’s level of investment was questioned by the MPs. On November 28, a legislative session will examine the debates surrounding the government laws about investing in digital assets in greater detail, according to a Singaporean daily.
The opposition MPs have that Temasek be questioned about its risk management techniques and investment strategy by a nonpartisan committee. Temasek, a state-backed investor from Singapore, was one of 69 investors who contributed to the $420 million funding round for the FTX cryptocurrency exchange in October 2021.
The corporation had put $210 million into the international exchange for a 1% minority ownership and another $65 million into FTX.US, one of its sister companies. However, “regardless of the outcome of FTX’s bankruptcy protection case,” the state-backed investor wrote off the whole $275 million it had invested in the cryptocurrency exchange.
Temasek further disclosed that, despite spending eight months conducting due diligence on FTX’s financial statements in 2021, it still decided to invest $275 million in the defunct crypto exchange. In addition to Temasek, Sequoia Capital reduced the value of the entire $214 million it had invested in the cryptocurrency exchange.
Millions of individual investors have been hardest hurt by the FTX collapse, whose funds were plundered and used by the cryptocurrency exchange to reduce its own risk. The collapse has also sparked a larger debate about regulations and a call for tighter control over these centralized corporations.
