Temasek Writes Down $275 Million Investment in FTX Ahead of Bankruptcy File
Singaporean regional investor Temasek Holdings said it will write down a total investment of $275 million (roughly Rs. 2,240 crore) in the fall of crypto currency exchange FTX, in the latest move by FTX investors.
“Due to FTX’s financial condition, we have decided to write down our full investment in FTX, regardless of the outcome of FTX’s bankruptcy protection filing,” Temasek said in a detailed statement on Thursday.
Other backers of FTX such as SoftBank Group’s Vision Fund and Sequoia Capital also marked their investments at zero after FTX, founded by Sam Bankman-Fried, filed for bankruptcy protection in the US last week in a high-profile blow to -crypto so far.
Temasek said it invested $210 million (about Rs. 1,700 crore) for a small 1% stake in FTX International, and $65 million (about Rs. 530 crore) for a small 1.5 percent stake. at FTX US, in two funding rounds from October 2021 to January 2022.
“The cost of our investment in FTX was 0.09 per cent of our total portfolio value of $294.3 billion (approximately Rs. 24,00,350 crore) as on 31 March 2022,” it said.
Temasek said its early stage investments make up about 6 percent of its total portfolio.
It said the thesis of its funding of FTX was to invest in a leading digital asset exchange that would provide it with “protocol agnostic and market neutral exposure” to crypto markets with an income model and no trading or balance risk.
Temasek said it currently has no direct exposure to cryptocurrencies.
It said it conducted a thorough audit of FTX from February to October 2021, when it reviewed FTX’s audited financial statements, which showed it was profitable.
“It is clear from this investment that perhaps our belief in the actions, judgment and leadership of Sam Bankman-Fried, based on our interactions with him and the opinions expressed in our discussions with others, appears to be misplaced,” the statement said.
© Thomson Reuters 2022