Temasek, the national investment fund of Singapore, is getting ready to write off the entire $275 million it invested in FTX.
Notably, throughout two funding rounds from October 2021 to January 2022, Temasek contributed $210 million for a minority stake of 1% in FTX International and invested $65 million for a minority stake of 1.5% in FTX US. The publicly issued official statement stated,
“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.“
Worldwide organizations keep putting FTX, a bankrupt cryptocurrency exchange corporation, further and further away. The Sequoia Capital team revealed exactly one week ago that they were fully devaluing their FTX assets. Sequoia cited FTX’s “liquidity crunch” and “solvency risk” as justifications for its decision in a letter to investors.
Temasek misplaces its faith in FTX and SBF
Temasek performed a rigorous “due diligence procedure” on FTX, much like they did with their prior investments. A similar period, from February to October of last year, lasted for about eight months. According to the statement, they examined the exchange’s audited financial statement at that time, which revealed that it was “profitable.” In addition, they interviewed individuals who were acquainted with the business to get their opinions on the organization and management team.
“We recognise that while our due diligence processes may mitigate certain risks, it is not practicable to eliminate all risks.“
Several regulatory bodies from around the world are actively investigating the exchange for misusing and mishandling customer assets. If the accusations were accurate, according to Temasek, it would constitute “severe misconduct or fraud.” The statement went on to say,
“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.“
