Temasek writes down $275mn ‘misplaced’ FTX investment

Temasek has written off its $275mn stake in cryptocurrency company FTX, with the Singapore state investor saying its trust in former chief executive Sam Bankman-Fried appeared “misplaced”.

Temasek invested $210mn in FTX International and $65mm in the company’s US subsidiary across two funding rounds. The total cost of the investment was 0.09 per cent of its S$403bn (US$293bn) portfolio, it said on Thursday.

Temasek was one of the blue-chip investors in Bankman-Fried’s cryptocurrency exchange, which collapsed into bankruptcy this month. SoftBank’s Vision Fund and Sequoia Capital have also had to mark down their FTX investments to zero.

Along with Temasek, the support of international investors including BlackRock and the Ontario Teachers’ Pension Plan gave FTX credibility.

“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,” Temasek said.

The Singaporean investor defended its “extensive” eight-month due diligence of FTX in 2021. It is “not practicable to eliminate all risks”, it added.

Temasek’s writedown comes as FTX publicly distances itself from Bankman-Fried, who has repeatedly taken to Twitter to make statements about the company he founded and the events that led to its collapse.

“Mr. Bankman-Fried has no ongoing role at [FTX], FTX US, or Alameda Research Ltd. and does not speak on their behalf,” John Ray, the newly appointed chief restructuring officer and chief executive at FTX, said in a statement.

Bankman-Fried, who resigned as chief executive on November 11, the day FTX filed for bankruptcy protection in Delaware, said on Wednesday that the group became “overconfident and careless” as its brand grew.

“FTX was the darling of Silicon Valley,” he said, adding that he was going to “care less” about a “dumb, contentless, ‘good actor’ framework”. He also said financial services regulators have an “impossible job”.

“Even so, there are regulators who have deeply impressed me with their knowledge and thoughtfulness . . . but most are overwhelmed,” Bankman-Fried said.