Temasek has had very limited effects after the fall of FTX. According to Deputy Prime Minister Lawrence Wong, the failure of the cryptocurrency exchange FTX has “very limited” effects on the larger financial system but damages the standing of Singapore’s state-owned investor Temasek Holdings Pte.
In response to a barrage of inquiries from lawmakers, Wong said in parliament on Wednesday that the FTX loss was disappointing and that it was being taken seriously. After Sam Bankman-crypto Fried’s empire collapsed on November 11, Temasek wrote down the entirety of its $275 million investment in FTX.
Temasek will have an independent team to review the loss
According to an updated explainer page on its website, Temasek will have an impartial team examine the defeat. According to Wong, if there is negligence or misconduct within the organization, the government won’t rule out conducting an outside investigation. The FTX loss, in his words, was an “exceptional situation.”
The loss, according to Wong, who is also the finance minister, did not indicate that Temasek’s governance system was ineffective and “no amount of due diligence and monitoring can completely eliminate the risks.”
However, Singapore’s incoming leader told parliament that the defeat was “disappointing” and had hurt Temasek’s standing.
“The fact that other leading global institutional investors like BlackRock and Sequoia Capital also invested in FTX does not mitigate this,” said Wong.
According to Temasek, it had no current direct exposure to cryptocurrencies, and the cost of its investment in FTX was 0.09% of its net portfolio value of S$403 billion ($293.97 billion) as of March 31, 2022.
Temasek provided an explanation for its actions, stating that from February to October 2021, it had performed “extensive due diligence” on FTX and that its audited financial statement had since “shown it to be profitable.”
The individual loss, according to Wong, had no bearing on Singapore’s reserve returns. After FTX, originally established by Sam Bankman-Fried, filed for bankruptcy in the US this month week in the highest-profile cryptocurrency meltdown to date, FTX’s other backers, including SoftBank Group Corp.’s Vision Fund and Sequoia Capital, also reduced their investment to zero.
The fall of FTX and its ripples are still visible in the cryptocurrency market.