Singapore’s state holding company, Temasek, announced punitive measures against the team and senior management involved in its $275 million investment in FTX. According to a statement, salaries of the involved team members will be reduced, reflecting the negative impact on Temasek’s reputation due to backing the controversial exchange.
The decision follows an independent internal review, conducted by an external party and presented to Singapore’s sustainability board. Although the review found no misconduct from the team members, the implemented penalty can be seen as an effort to save face. The responsible personnel also acknowledged “collective accountability” for investing $210 million in the global exchange for a 1% minority stake, with an additional $65 million invested in the exchange’s US subsidiary from October 2021 to January 2022.
Following FTX’s collapse in early November last year, Temasek moved swiftly to write down all of its FTX investments. The company, one of Singapore’s two major sovereign wealth funds, manages a portfolio of around S$403 billion ($297.8 billion) as of March 2022, primarily in Singapore and across the Asia region.
Expressing disappointment with the outcome, Temasek’s statement cited FTX’s “fraudulent” activity, alleging it was “intentionally hidden” from investors. Singapore has tried to avoid blame, asserting that it did its part to prevent financial harm to its citizens and entities. Nonetheless, the company admitted to being disappointed with the investment’s outcome and its negative effect on the fund’s reputation.
FTX’s CEO Sam Bankman-Fried and other top executives stand accused of diverting billions worth of cryptocurrency from FTX to its trading unit Alameda Research, which eventually lost the funds through high-risk market bets. Consequently, the exchange is said to have caused severe losses for numerous investors, triggering a prolonged and extensive sell-off in the industry.
As Singapore grapples with the fallout, crypto enthusiasts around the globe will be watching closely to see how this situation plays out for Temasek and FTX. The lesson to be learned here is that even the most reputable companies and governments can be caught unaware by fraudulent business practices in the ever-evolving world of cryptocurrency.
Source: Blockworks
