Temasek Holdings has introduced plans to put in writing down its funding in troubled cryptocurrency trade 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 yr. Collectively, its investments within the cryptocurrency trade accounted for 0,09% of its web portfolio worth of SG$403 billion ($293.52 billion), Temasek stated in an announcement Thursday.
Pointing to its perception that exchanges had been a key element of world monetary methods, it stated: “The thesis for our funding in FTX was to spend money on a number one digital asset trade, offering us with protocol agnostic and market impartial publicity to crypto markets with a charge earnings mannequin and no buying and selling or steadiness sheet danger.”
It famous, nevertheless, that it had develop into obvious its perception within the “actions, judgement, and management” of FTX’s now-disgraced founder and CEO Sam Bankman-Fried was “misplaced”.
Temasek stated it ran an “in depth” due diligence course of on FTX that spanned some eight months by way of to its first funding in October 2021. This included a evaluation of the trade’s audited monetary assertion in addition to regulatory dangers related to crypto monetary market service suppliers.
Pointing to reviews that alleged FTX mishandled buyer belongings, Temasek stated it held corporations wherein it invested accountable for his or her actions and obligation to adjust to native legal guidelines.
The Singapore funding agency stated it could transfer forward to put in writing down its full funding in FTX as a result of latter’s monetary place, and whatever the end result of the trade’s chapter safety submitting.
Temasek confused 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 trade carried important dangers alongside alternatives.
“There are inherent dangers at any time when we make investments, divest, or maintain our belongings, and wherever we function,” it stated. “Whereas this write-down of our funding in FTX is not going to have important affect on our general efficiency, we deal with any funding losses significantly and there can be learnings for us from this.”
Temasek stated its early-state investments accounted for about 6% of its total portfolio, with its blockchain investments “not a major” a part of such investments. It added that its investments right here had been centered on programmable money, digital belongings tokenisation, and decentralised id and information, and included blockchain expertise infrastructure resembling protocols, wallets, and metaverse.
Singapore’s central financial institution earlier this week stated FTX was not licensed and didn’t function within the city-state. Neither was the trade exempted from licensing, in accordance with the Financial Authority of Singapore (MAS), which famous that it was not potential to forestall Singapore customers from straight accessing abroad service suppliers, resembling FTX.
Responding to queries that its ban on Binance, inserting on its investor alert listing, had led native customers to take a position by way of FTX, MAS stated Binance was not prohibited from working in Singapore, however didn’t have the mandatory licence to solicit prospects. This meant it needed to cease doing so, the trade regulator stated.
Binance shuttered its digital fee token providers right here in February 2022 and withdrew its efforts to safe a neighborhood licence for its cryto trade. Experiences prompt the transfer was attributable to MAs’ regulatory necessities, although, Binance had stated it could focus its operations in Singapore on blockchain improvement.
In its assertion this week, MAS stated digital fee token service suppliers had been licensed underneath the nation’s Fee Companies Act for cash laundering in addition to terrorism financing dangers. Additionally they had been regulated for expertise dangers, however weren’t topic to guidelines that protected buyer monies or digital tokens from insolvency dangers, it stated, including that it had repeatedly reminded the general public in regards to the risks of cryptocurrency trading.
