Temasek to be cautious in crypto space after FTX incident

Temasek Holdings, one of Singapore’s sovereign wealth funds, has taken responsibility for its $275 million investment in the collapsed crypto exchange FTX. In a statement released on Monday, the fund stated that there was “fraudulent conduct intentionally hidden from investors, including Temasek.” While there was no misconduct by the investment team in making the investment recommendation, Temasek’s investment team and senior management, who are ultimately responsible for investment decisions, took collective accountability and had their compensation reduced, according to Temasek Chairman Lim Boon Heng. The fund wrote off its entire investment in FTX shortly after its collapse in November. At the time, Temasek claimed that it had conducted eight months of due diligence on FTX, reviewing its audited financial statements, analyzing regulatory risk, and cyber security threats. Following the collapse of FTX, Temasek said it intends to refine its investment appraisal procedure, particularly for rapidly growing firms. Temasek reiterated its decision not to invest in cryptocurrencies and said it will be cautious when considering new investments in the blockchain space. FTX was the only investment Temasek had in a crypto exchange. During FTX’s peak, it was available to users in Singapore, while its main rival, Binance, was blocked. The Monetary Authority of Singapore (MAS) added Binance to the Investor Alert List in September 2021, but did not do so for FTX. MAS later stated that this was because Binance directly solicited Singaporean customers and offered trades in Singapore dollars, which was not the case for FTX. Edited by Shaurya Malwa.

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