Singapore reveals $275m FTX investment

Tomiwo Ojo

Singapore has revealed that it backed the embattled cryptocurrency exchange FTX with a $275m investment and has now been burned by its sudden collapse.

State-owned investment company Temasek released a statement that it invested $275 million in the crypto exchange, which was the second largest cryptocurrency exchange at the time. FTX was widely considered one of the most reputable players in the market for digital assets.

In the statement released Thursday, Temasek said it had decided to write down the value of its full investment in the exchange to zero, “irrespective of the outcome of FTX’s bankruptcy protection filing,” CNN reports.

FTX’s sudden crash has had multiple repercussions on the crypto market, with investors and customers stunned. The value of some major coins dropped drastically, companies let staff go, and crypto enthusiasts have employed several means to mitigate the damage to the industry.

FTX Group abruptly filed for bankruptcy in the United States last Friday when its founder, Sam Bankman-Fried, resigned as CEO. The voluntary Chapter 11 proceedings included all the Exchange’s 130 additional affiliated companies.

Temasek said it had poured in $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.

This “write down of our investment in FTX will not have significant impact on our overall performance,” Temasek said in the statement. The investment company also gave details of its due diligence processes on the exchange, which took approximately eight months.

“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 added, referring to the 30-year-old founder of the exchange.

Read also: FTX appoints 5 new directors as bankruptcy proceeding starts

Impact of FTX’s fall from grace

FTX is now under criminal investigation in The Bahamas, where it moved its headquarters last year from Hong Kong.

The exchange was valued at $32 billion and had recruited high-profile backers, including SoftBank and Tiger Global, and celebrities such as football player Tom Brady, Gisele Bündchen, and tennis star Naomi Osaka before recent events.

Tom Brady and FTX

Last week, investor Sequoia Capital said it had marked the value of the exchange’s stake down to $0. An investor has sued Bankman-Fried and several celebrities who had endorsed the platform, including Brady and Bündchen.

On Wednesday, the lending arm of crypto brokerage Genesis suspended redemptions and new loan origination after an “abnormal” number of withdrawal requests that exceeded its current liquidity, citing market turmoil from the failure of the embattled crypto exchange..

The exchange has announced a slate of new independent directors to oversee the collapsed crypto empire as proceedings for its bankruptcy filing began.

Read more: Genesis halts withdrawal following FTX collapse

Mitchell Sonkin was appointed as a director at West Realm Shires, Matthew Rosenberg at Alameda Research and Rishi Jain at Clifton Bay Investments. Former U.S. District Court Judge Joseph Farnan and Matthew Doheny will oversee the trading arm of the exchange.

The latest statement on Tuesday explained that the embattled cryptocurrency exchange is currently speaking with the US Attorney’s Office and ‘dozens’ of US and international regulatory agencies.

FTX disclosed a severe liquidity crisis and confirmed that it had responded to a cyber attack on Nov. 11 after saying on Saturday it had seen “unauthorized transactions on its platform.

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