State-owned Temasek Holdings of Singapore has stated that it intends to write down all of its investment in the defunct cryptocurrency exchange FTX. The investing company claims that it has “misplaced” its faith in founder Sam Bankman-Fried (SBF).
Temasek Holdings disclosed how much it has invested in the cryptocurrency exchange in a statement:
Over the course of two funding rounds from October 2021 to January 2022, we invested US$210 million for a minority stake of 1% in FTX International and US$65 million for a minority stake of 1.5% in FTX US. As of the end of March 2022, the cost of our investment in FTX was 0.09% of our net portfolio value of S$403 billion.
A total of about $275 million was invested. Temasek, a state-owned investment firm, was founded to own and manage the assets that the Singaporean government had previously held. The company’s sole equity shareholder is the nation’s government.
As with all investments, Temasek stated, “we conducted an extensive due diligence process on FTX, which took approximately 8 months from February to October 2021.”
The company continued:
This investment suggests that perhaps our confidence in Sam Bankman-Fried’s behavior, judgment, and leadership—which was based on our interactions with him and the opinions we shared with others—was misplaced.
In light of FTX’s financial situation, we have made the decision to write down the entirety of our investment in FTX, regardless of the outcome of FTX’s filing for bankruptcy protection.
Everywhere that investment firms invest, sell their holdings, or hold their assets, there are inherent risks. Therefore, Temasek came to the conclusion that even though writing down their investment in FTX will not have a significant impact on their overall performance, the company treats any investment losses seriously and will learn from this.