Singapore’s Temasek Writes Off $275 Million FTX Investment

Singapore’s state-owned investor, Temasek Holdings announced on Thursday that it would be writing off its entire $275 million investment into the collapsed cryptocurrency exchange, FTX.

It invested $210 million for around a 1 percent stake in FTX International and $65 million for about 1.5 percent in FTX US. Both companies have now filed for Chapter 11 bankruptcy protection in the United States.

“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,” the investor stated in a press release.

Our statement on FTX. https://t.co/pok0EfNEwq

— Temasek (@Temasek) November 17, 2022

Temasek manages a portfolio of S$403 billion ($294.3 billion) and is owned by the Government of Singapore. Its early-stage investments make up about 6 percent of its net portfolio value, and the cost of the FTX investment was only 0.09 percent of the total figure.

The investor further highlighted that it has no direct exposure to cryptocurrencies.

“There are inherent risks whenever we invest, divest, or hold our assets, and wherever we operate. While this write-down of our investment in FTX will not have a significant impact on our overall performance, we treat any investment losses seriously, and there will be learnings for us from this,” Temasek added.

The Singapore investor followed Soft Bank Group’s Vision Fund and Sequoia Capital in writing off their FTX investment to zero. The Vision Fund has a $100 million investment into FTX, while Sequoia, along with a sister fund, held a $210 million stake in the crypto exchange.

Established in 2019, FTX was an aggressively growing cryptocurrency exchange that was valued at $34 billion in its last funding round. However, the multi-billion dollar empire of Sam Bankman-Fried collapsed within days, revealing some horrific business practices of his and his top management.

The exchange has been blamed for using a portion of client funds for taking positions in the cryptocurrency market and is now reportedly facing regulatory scrutiny. Additionally, the regulators in Cyprus and Australia suspended the regulatory license of the local FTX entities.

Lawsuit Naming Celebrities

An Oklahoma-based FTX investor, on behalf of other investors, filed a lawsuit against the collapsed cryptocurrency exchange for 'misrepresentations and omissions', even naming high-profile celebrities and investors who endorsed the exchange. Apart from Sam Bankman-Fried, other names in the lawsuit are American football star Tom Brady and his supermodel former wife Gisele Bundchen, retired basketball player Shaquille O’Neal, tennis Grand Slam champion Naomi Osaka, actor and comedian Larry David and billionaire investor Kevin O’Leary.