Temasek writes down $377m investment in FTX

SINGAPORE - Singapore state investor Temasek Holdings said it would write down the value of its entire investment of $275 million (S$377 million) in collapsed crypto currency exchange FTX, in the latest move by FTX's investors.

"In view of FTX's financial position, we have decided to write down our full investment in FTX, irrespective of the outcome of FTX's bankruptcy protection filing," Temasek said in a detailed statement on Thursday (Nov 17).

FTX's other backers such as SoftBank Group Corp's Vision Fund and Sequoia Capital have also marked down their investment to zero after FTX, founded by Sam Bankman-Fried, filed for bankruptcy protection in the United States last week in the highest-profile crypto blowup to date.

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Temasek said it had invested $210 million for a minority stake of about 1 per cent in FTX International, and $65 million for a minority stake of about 1.5 per cent in FTX US, across two funding rounds from October 2021 to January 2022.

"The cost of our investment in FTX was 0.09 per cent of our net portfolio value of $403 billion as of March 31, 2022," it said.

Temasek said its early stage investments made up about 6 per cent of its total portfolio.

It said the thesis for 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 a fee income model and no trading or balance sheet risk.

Temasek said it currently had no direct exposure in cryptocurrencies.

It said it had conducted an extensive due diligence process on FTX from February to October 2021, during which it had reviewed FTX's audited financial statement, which showed it to be profitable.

"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," it said.