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“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.
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.
Temasek said it had invested $210 million for a minority stake of about 1% in FTX International, and $65 million for a minority stake of about 1.5% in FTX US, across two funding rounds from October 2021 to January 2022.
“The cost of our investment in FTX was 0.09% of our net portfolio value of S$403 billion ($294.3 billion) as of 31 March 2022,” it said.
Temasek said its early stage investments made up about 6% 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.
($1 = 1.3693 Singapore dollars)
