Temasek Writes Off $275 Million FTX Investment

Temasek's Decision to Write Off FTX Investment

Temasek, a prominent Singaporean investment fund, has made the strategic decision to write off its $275 million investment in the struggling cryptocurrency exchange FTX. This move comes shortly after FTX encountered a significant liquidity crisis. Despite the uncertain outcome of FTX's bankruptcy protection filing, Temasek has opted to mark off this investment.

Details of the Investment

The investment comprised $210 million for a minority stake of approximately 1% in FTX International and another $65 million for about a 1.5% stake in FTX US. These investments were made over two funding rounds conducted between October 2021 and January 2022. Temasek conducted an extensive eight-month due diligence process before committing to these investments.

Impact on Temasek's Portfolio

Temasek has clarified that the financial impact of this write-off is negligible, representing only 0.09% of its $403 billion net portfolio as of March 2022. The firm emphasized that this write-off will not significantly affect its overall performance. Furthermore, Temasek highlighted that it does not have direct exposure to cryptocurrency, countering any misconceptions about its involvement in the crypto market.

Broader Implications of FTX's Collapse

The downfall of FTX, once one of the largest crypto exchanges, has sent shockwaves through the investment community. However, Temasek asserts that this situation should not be viewed as a condemnation of the cryptocurrency and blockchain sectors, but rather as a misjudgment regarding its investment in Bankman-Fried.

The collapse of FTX has spurred other companies to reassess their own investments in the exchange, reflecting the broader concerns within the crypto investment landscape.