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Singapore's Temasek Holdings, a sovereign wealth fund in the country, has vowed to accept “collective accountability” for its unfortunate $275 million investment in the now-defunct cryptocurrency exchange, FTX.
In a press release issued on Monday morning, the fund disclosed the presence of “fraudulent conduct intentionally hidden from investors, including Temasek.”
"Although there was no misconduct by the investment team in reaching their investment recommendation, the investment team and senior management, who are ultimately responsible for investment decisions made, took collective accountability and had their compensation reduced," Temasek Chairman Lim Boon Heng said in a statement posted to its website.
In the aftermath of FTX's collapse in November, the fund swiftly declared a total write-off of its investment. Temasek revealed that its investment of $210 million, which constituted 1% of FTX International, along with an additional $65 million for 1.5% of FTX.US, represented a mere 0.09% of the firm's net portfolio value of $293.5 billion (SGD 403 billion) from the preceding year.
Temasek stated that during that period, it conducted an extensive eight-month due diligence process on FTX, which involved thorough examination of its audited financial statements, assessment of regulatory risks, and evaluation of cyber security threats. Following the unfortunate collapse of FTX, Temasek expressed its intention to enhance its investment appraisal procedure, particularly for rapidly expanding companies.
Temasek restated its stance on cryptocurrencies, emphasizing that it has no intention of investing in them, and emphasized the need for caution when evaluating potential investments in the blockchain sector. FTX represented Temasek's sole investment in a cryptocurrency exchange.
During its prime, FTX was available to users located in Singapore, whereas its primary competitor, Binance, was restricted or inaccessible.
In September 2021, the Monetary Authority of Singapore (MAS) included Binance in its Investor Alert List, while no such action was taken against FTX. MAS clarified that this decision was based on the fact that Binance actively solicited customers from Singapore and facilitated trades in Singapore dollars, whereas FTX did not engage in similar practices.
