The Singapore-based investment company Temasek is planning to cut the compensation for those who have suggested investment in FTX. Notably, late last year, the crypto exchange, FTX, filed for chapter-11 bankruptcy which almost shook the whole crypto market. This chapter-11 filing by FTX not only affected the crypto firms but also spread its outcome to many other financial firms.
Due to the recent decision by Temasek, it seems like it is also one of those firms that want to correct its mistakes linked with FTX investment. FTX was a Bahamas-based crypto exchange that was founded by Sam-Bankman Fried (SBF).
SBF is accused of fraud charges, while earlier this month, his lawyers filed motions to dismiss the fraud charges against him. Notably, his next trial is scheduled for October 2023, in New York.
The Funding of Temasek in FTX
The company has invested nearly $210 million in FTX International, and $65 million in FTX U.S. This investment funding was done across two funding rounds from October 2021 to January 2022. The percentage of its investment in FTX is nearly 0.09%, which was quite a small fraction of Temasek’s fund.
Meanwhile, the company has explained that it invests in early-stage companies in new sectors and emerging technology. Its focus was to understand how it will affect the portfolio and create a promising sustainable future growth, in case the invested industry booms in the long term. The net portfolio value of Temasek is nearly $304 billion.
There are unknown deductions in compensation of the team and the upper management who were involved in the FTX investment. According to a report by CNBC, the Chairperson of the company, Lim Boon Heng, also shared his thoughts, as he said, “although there was no misconduct by the investment team in reaching their investment recommendation.”
The Chairperson further added that “with FTX, as alleged by prosecutors and as admitted by key executives at FTX and its affiliates, there was fraudulent conduct intentionally hidden from investors, including Temasek.”
This decision by Temasek was to hold the team and senior management accountable for the incompetence and financial damage faced by the institution. However, it was the collective decision of the team to take accountability and have their compensation reduced.
When FTX filed for Chapter-11 in November 2022, the Singapore-based investment company started its internal review related to its investment in FTX. As a result, in the next month Temasek wrote off $275 million. It also added that it conducted “extensive due diligence” before initiating its investment in FTX, while its audited financial statement (back then) “showed it to be profitable.”
Other than Temasek, Japanese global investment firm, SoftBank’s venture capital fund “Vision Fund”, and American venture capital firm, “Sequoia Capital” also completely wrote off their investment in FTX after its collapse.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/05/29/temasek-statement-regarding-its-teams-investment-in-ftx/