Singapore state investment firm to write down $275M in FTX

Temasek Holdings has introduced plans to jot down down its funding in troubled cryptocurrency change FTX, saying its perception in disgraced founder Sam Bankman-Fried was “misplaced”. The Singapore state-owned funding agency had participated in two funding rounds, totalling $275 million in funding.

It invested $210 million for a minority stake of about 1% in FTX Worldwide in October 2021, earlier than forking out one other $65 million for 1.5% in FTX US in January this 12 months. Collectively, its investments within the cryptocurrency change accounted for 0,09% of its web portfolio worth of SG$403 billion ($293.52 billion), Temasek mentioned in a press release Thursday.

Pointing to its perception that exchanges had been a key element of world monetary methods, it mentioned: “The thesis for our funding in FTX was to put money into a number one digital asset change, offering us with protocol agnostic and market impartial publicity to crypto markets with a price revenue mannequin and no buying and selling or stability sheet threat.”

It famous, nonetheless, that it had grow to be obvious its perception within the “actions, judgement, and management” of FTX’s now-disgraced founder and CEO Sam Bankman-Fried was “misplaced”.

Temasek mentioned it ran an “in depth” due diligence course of on FTX that spanned some eight months by means of to its first funding in October 2021. This included a assessment of the change’s audited monetary assertion in addition to regulatory dangers related to crypto monetary market service suppliers.

Pointing to experiences that alleged FTX mishandled buyer property, Temasek mentioned it held firms wherein it invested accountable for his or her actions and obligation to adjust to native legal guidelines.

The Singapore funding agency mentioned it might transfer forward to jot down down its full funding in FTX because of the latter’s monetary place, and whatever the end result of the change’s chapter safety submitting.

Temasek harassed it nonetheless believed within the potential of blockchain applications and decentralised technologies to remodel sectors, however famous that the “nascency” of the blockchain and crypto business carried vital dangers alongside alternatives.

“There are inherent dangers every time we make investments, divest, or maintain our property, and wherever we function,” it mentioned. “Whereas this write-down of our funding in FTX is not going to have vital affect on our total efficiency, we deal with any funding losses severely and there will probably be learnings for us from this.”

Temasek mentioned its early-state investments accounted for about 6% of its total portfolio, with its blockchain investments “not a big” a part of such investments. It added that its investments right here had been centered on programmable money, digital property tokenisation, and decentralised identification and information, and included blockchain know-how infrastructure resembling protocols, wallets, and metaverse.

Singapore’s central financial institution earlier this week mentioned FTX was not licensed and didn’t function within the city-state. Neither was the change exempted from licensing, in response to the Financial Authority of Singapore (MAS), which famous that it was not attainable to forestall Singapore customers from immediately accessing abroad service suppliers, resembling FTX.

Responding to queries that its ban on Binance, inserting on its investor alert checklist, had led native customers to take a position by means of FTX, MAS mentioned Binance was not prohibited from working in Singapore, however didn’t have the mandatory licence to solicit clients. This meant it needed to cease doing so, the business regulator mentioned.

Binance shuttered its digital fee token providers right here in February 2022 and withdrew its efforts to safe an area licence for its cryto change. Stories steered the transfer was as a consequence of MAs’ regulatory necessities, although, Binance had mentioned it might focus its operations in Singapore on blockchain improvement.

In its assertion this week, MAS mentioned digital fee token service suppliers had been licensed underneath the nation’s Cost Providers Act for cash laundering in addition to terrorism financing dangers. In addition they had been regulated for know-how dangers, however weren’t topic to guidelines that protected buyer monies or digital tokens from insolvency dangers, it mentioned, including that it had repeatedly reminded the general public concerning the risks of cryptocurrency trading.