Singapore’s Temasek opens evaluate into ill-fated FTX funding

Singapore’s Temasek has launched a evaluate of its $275mn funding in FTX because the state-owned funding fund is scrutinised over the due diligence it carried out earlier than backing Sam Bankman-Fried’s crypto trade.

Lawrence Wong, Singapore’s deputy prime minister, informed parliament on Wednesday that Temasek’s losses had been “disappointing” and had brought about reputational harm for the city-state.

Temasek earlier this month wrote off its funding in FTX, which constituted 0.09 per cent of its S$403bn (US$295bn) portfolio however offered the crypto group with a seal of approval from a serious fund supervisor. In response to queries by the Monetary Instances, the fund had defended its “eight-month due diligence” course of however earlier this month admitted its belief in former chief government Bankman-Fried appeared “misplaced”.

Temasek’s inquiry comes as filings by FTX’s new administration in US chapter courtroom level to a extreme lack of economic controls at a bunch that was as soon as valued at $32bn by a roster of big-name traders that additionally contains enterprise capital agency Sequoia and Japan’s SoftBank.

Confidence in Singapore’s potential to control the digital property trade has been undermined by a sequence of crypto failures linked to the city-state this yr, together with the collapse of hedge fund Three Arrows Capital and crypto platform Hodlnaut. Singaporean police mentioned final week it was investigating the platform and its administrators “for doable dishonest and fraud offences”.

The town-state’s sovereign wealth fund GIC can also be going through strain as an investor of crypto dealer Genesis. Genesis mentioned following FTX’s collapse earlier this month that it had about $175mn in funds locked in an account on the platform. A number of days later, Genesis paused withdrawals at its lending unit citing “unprecedented market turmoil”.

The fallout over FTX and the losses incurred by retail traders have resulted in uncommon public criticism of Temasek, with many questioning its due diligence. Singapore customers accounted for the second-largest share of internet visitors to FTX.com, accounting for about 5 per cent of visitors share, in keeping with knowledge from CoinGecko.

“It was a moonshot funding, however Temasek seems foolish for pushing the road they did eight months of due diligence. They need to have simply mentioned we took a punt, it didn’t work out, and we’re sorry,” mentioned one main investor within the personal fairness area.

In a Fb submit on Saturday, Ho Ching, the previous Temasek chief government who’s the spouse of Singapore’s chief Lee Hsien Loong, known as fund’s loss “egg on our face”. However she defended the investor’s general technique, saying “a few of Temasek’s finest investments had been made by being contrarian”.

Wong, who additionally serves as Singapore’s finance minister, mentioned on Wednesday in response to questions from members of parliament that FTX’s collapse would have a restricted influence on the city-state’s broader monetary system.