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Temasek writes off USD 275 mln investment in FTX crypto exchange

Thursday 17 November 2022 13:22 CET | News

Singapore-based investor Temasek Holdings has decided to write off its USD 275 million investment in FTX following its bankruptcy filing.

 

The state-owned investor put in USD 65 million for about 1.5% in FTX US and USD 210 million for around a 1% stake in FTX International. The write-off comes in the context of both of these companies filing for Chapter 11 bankruptcy protection in the United States. 

Temasek representatives cited by financemagnates.com revealed that they’ve decided to write off their investment no matter the outcome of FTX’s bankruptcy protection filing. They also highlighted that investing, divesting, or holding assets are all inherently risky endeavours and that the write-off will not have a significant impact on their overall performance. 

According to the same source, Temasek manages a portfolio of SGD 403 billion (USD 294.3 billion), and its early-stage investments make up about 6% of its net portfolio value. As far as the FTX investment goes, it represented 0.09% of the total figure. Temasek’s representatives wanted to point out that their investment in FTX was not an investment in cryptocurrencies. 

Soft Bank Group’s Vision Fund and Sequoia Capital also wrote off their USD 100 million and USD 210 million respective investments into FTX. In January 2022, FTX has announced the closing of a USD 400 Million Series A round that raised the company’s valuation to USD 8 billion. Aside from Temasek and Vision Fund, other noteworthy investors included Paradigm, NEA, Multicoin Capital, Tribe Capital, Ontario Teachers' Pension Plan Board, Greenoaks Capital, Steadview Capital, and Lightspeed Venture Partners.

 

Singapore-based investor Temasek Holdings has decided to write off its USD 275 million investment in FTX following its bankruptcy filing.

 

Coinbase warns that the impact of FTX’s collapse is still to show 

On 16 November 2022, Coinbase officials cited by Reuters compared FTX’s collapse with the 2008 financial crisis in the sense that both exposed poor credit practices and poor risk management. According to the same source, it will take several more weeks to gauge the full impact of the event, but one potential consequence could be a drive towards regulation both in the US and globally. 

On 11 November 2022, Reuters also reported on Coinbase’s intent on writing off the investment its ventures arm made in FTX in 2021. The same source suggested that Coinbase might also participate in the FTX bankruptcy proceedings to seek a claim on the USD 15 million that it has in deposits at FTX.


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Keywords: investment, cryptocurrency exchange, financing , crypto
Categories: DeFi & Crypto & Web3
Companies: Temasek
Countries: Singapore
This article is part of category

DeFi & Crypto & Web3

Temasek

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