The Singaporean investment conglomerate, Temasek, recently relinquished its plans to invest in crypto exchanges amid persisting regulatory uncertainties. Rohit Sipahimalani, Temasek’s Chief Investment Officer, shared in a CNBC interview the dismal experience of losing an entire 275$ million investment with the now-defunct crypto exchange FTX. Given the foggy legislations and market conditions, the firm currently seems diffident in investing in cryptocurrency-related companies.
Sipahimalani’s comments surfaced amidst ongoing legal pursuits against significant crypto firms, including Binance and Coinbase, by the US SEC. With the present conditions, he implied that the company is not at ease with investing in exchanges. Temasek has traditionally restrained from directly investing in cryptocurrencies, opting to support crypto service providers instead. However, the unprofitable venture in FTX has tarnished the repute of the state-owned investor.
The ill-fated FTX investment was a segment of the earlier strategy of Temasek. They recognized and sought potential “disruptive technologies to see what’s around the corner.” At the time, FTX appeared to have a sound technology framework and was gaining market share, qualifying it as an appealing investment opportunity. The unfortunate incident of fraud that followed has left the company disappointed, though it came with critical lessons. Regardless, Sipahimalani highlighted that investments in crypto firms inevitably involve some degree of risk. As he put it, “it’s impossible to always discover fraud no matter how much due diligence that we do.”
However, it’s essential to clarify that Temasek hasn’t completely shut its doors on investing in crypto-related firms. If the regulatory framework becomes amenable and the investment opportunity aligns, Sipahimalani argued that there would be no reason for them to remain hesitant. Still, this hint towards potential future investments does not eclipse the fact that Temasek registered its worst returns in seven years on July 11, fueled partially by macroeconomic and geopolitical challenges. Surely this fuels the skepticism within the company towards risky investments. At this point, there’s a delicate balance to strike between the allure of cutting-edge technology and the sobering reality of fraud and uncertainty. Only time will tell where Temasek and other investors will land.
Source: Cryptonews
