Temasek writes down $275 million investment in FTX

Temasek, Singapore's sovereign wealth fund that manages about $300 billion, has written down all of its $275 million investment in FTX and FTX US.

Temasek had invested $210 million for a 1% stake in FTX International and another $65 million in FTX US for a 1.5% stake. The investments occurred across two rounds in October 2021 and January 2022, respectively, according to a statement issued by the fund on Nov. 17.

“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,” it said.

In its statement today, Temasek emphasized that the $275 million hit represents just 0.09% of its net portfolio value of S$403 billion ($294 billion) as of March 31, 2022. The company also stressed that it had performed “an extensive due diligence process on FTX, which took approximately eight months from February to October 2021,” while conceding that “it is not practicable to eliminate all risks.”

The company — which allocates 6% of its portfolio to early-stage bets — said that it continues to recognize “the potential of blockchain applications and decentralized technologies to transform sectors and create a more connected world.”

“But recent events have demonstrated what we have identified previously — the nascency of the blockchain and crypto industry and the innumerable opportunities as well as significant risks involved,” it added.

Bloomberg reported earlier that Temasek and Softbank would write off hundreds of millions of dollars they had invested in FTX, the failed crypto exchange. Sequoia Capital, the Silicon Valley investment firm, was quick to write down to zero its own $213.5 million investment in FTX entities.