Temasek Cuts Compensation for Team Behind FTX Investment

On Monday, May 29, Singapore’s Temasek Holdings announced that it will cut compensation for the team who had recommended an investment in the now-bankrupt crypto exchange FTX.

Following the collapse of the FTX exchange in November 2022, Temasek had to write down its $275 million investment in the company. Soon after, the Singapore state investor issued a review of its investment in the exchange In a statement posted on the company’s official website, Temasek Chairman Lim Boon Heng said:

“Although there was no misconduct by the investment team in reaching their investment recommendation, the investment team and senior management, who are ultimately responsible for investment decisions made, took collective accountability and had their compensation reduced”.

However, the Singapore-based investment firm hasn’t detailed the amount of compensation cut for the senior management team behind the FTX investment. As of March 31, 2022, Temasek’s assets under management stood at S$403 billion ($304 billion). Thus, the cost of its investment was 0.09% of its net portfolio.

Interestingly, before the collapse of FTX, Temasek said that they have done extensive due diligence wherein its audited financial statement showed the exchange to be profitable.

Other Big Investors Trapped Into FTX

Other backers of the crypto exchange FTX such as Sequoia Capital and SoftBank Group Corporation’s Vision Fund had to also mark down their FTX investment to zero after the collapse.

“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. Nevertheless, we are disappointed with the outcome of our investment, and the negative impact on our reputation,” Lim said in a statement. By investing in early-stage startups, Temasek is planning to generate sustainable returns over the long term.

On the other hand, the ongoing case of Sam Bankman-Fried and his team members is taking new twists. In the federal court filings earlier this month, SBF asked judges to drop 13 criminal charges against him. Also, the new team at FTX has been planning to restart operations at the exchange, however, the timeline for the same isn’t fixed.

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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