Singapore state investor Temasek has fully written down its investments in fallen crypto exchange FTX, calling the initial confidence in founder Sam Bankman-Fried «misplaced».
Temasek Holdings will write down its $275 million investment in FTX, according to a statement, which accounted for 0.09 percent of the total portfolio value at S$403 billion ($294 billion), as of March 31 this year.
Investments of $210 million investment for around 1 percent stake and $65 million for about 1.5 percent were made across two funding round from October 2021 to January 2022.
Overall, the portfolio includes early stage investments that account for around 6 percent and no direct exposure to cryptocurrencies.
Due Diligence
Temasek underlines that extensive due diligence on FTX was conducted from February to October 2021, including a review of the crypto exchange’s audited statement which showed it to be profitable. Other efforts were also made across regulatory, anti-money laundering and cybersecurity risks.
The Singapore state investor also gathered qualitative feedback on FTX and its management team based on interviews with people familiar with the firm.
«Misplaced» Belief
Temasek admits that while due diligence can mitigate some risks, it is «not practicable to eliminate all risks».
«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,» the state investor added.
