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As the remnants of FTX continue to circle the drain amid a storm of cryptic tweets from the former CEO, more and more companies have taken the necessary steps to clear the air, announcing their lack of exposure to the business.
Meanwhile, some entities that were exposed — like Huobi — are taking steps to try to remove what’s left of their assets.
Not worth it
However, some investment giants have made the decision to mark their investments with the exchange as a loss, regardless of the end of the US government’s investigation into FTX and its related companies.
Founded in 1974 by the Singaporean government, Temasek is a private company whose sole shareholder is Singapore’s Minister of Finance. Its purpose is to manage government investments in various industries, allowing the Ministry of Finance to focus on core issues, such as regulation and tax collection.
In a statement from Temasek, an investment firm worth over $293 billion, a spokesperson for the investment giant said it would write off its investment in FTX and FTX US.
According to the statement, Temasek recognizes the value of blockchain technology in various industries and clarifies that his investments in FTX were meant to go into blockchain technology, not cryptocurrencies.
However, Temasek admits that even his rigorous auditing process is not always enough to detect mismanagement in a company he is considering investing in.
“We recognize that while our due diligence processes can mitigate some risks, it is not possible to eliminate all risks. Reports have since emerged that client assets have been mismanaged and misused in FTX. If these statements are true, it amounts to gross misconduct or fraud at FTX. All of this is currently under investigation by regulators.
Ethical concerns at stake
Due to its unique position as a private company that represents government interests, Temasek holds itself to a high ethical standard. As a result, Temasek reportedly made the decision to write down his investments in FTX and FTX US to mitigate any potential damage to his reputation.
Although a write-down is not as serious as a write-off, it is still a drastic action taken only when the market value of an asset is believed to have fallen well below the value for which it is traded.
Temasek’s exposure to FTX was limited – according to the release, only $275 million was invested in both FTX and FTX US, which is only 0.09% of Temasek’s total portfolio.
As this amount was only about 1% of FTX shares, Temasek had no place on the FTX board. However, as an unofficial representative of the Singaporean government, Temasek decided to hold himself to the same standards as a company with a seat on the board and distance himself from the crumbling old crypto powerhouse.
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