Singapore state-owned Temasek Holdings has announced its plans to write down its entire investment in the bankrupted crypto exchange FTX. The investment firm says that its belief in founder Sam Bankman-Fried (SBF) has been "misplaced".
In a statement, Temasek Holdings revealed how much it had invested in the crypto-exchange:
We invested US$210 million for a minority stake of ~1% in FTX International, and invested US$65 million for a minority stake of ~1.5% in FTX US, across 2 funding rounds from October 2021 to January 2022. The cost of our investment in FTX was 0.09% of our net portfolio value of S$403 billion as of 31 March 2022.
The investment totaled to around $275 million. Temasek, a state-owned investment company, was established to own and manage the assets that was previously held by the Singapore government. The country's government is the sole equity shareholder of the company.
Temasek explained that "similar to all investments, we conducted an extensive due diligence process on FTX, which took approximately 8 months from February to October 2021".
The company added:
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 .
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.
There are inherent risks wherever investment firms invest, divest, or hold assets. As such, Temasek concluded that even though writing down their investment in FTX will not significantly impact their overall performance, the firm treats any investment losses seriously and there will be learnings from this.