Singapore’s Temasek Cuts Senior Managers’ Pay After FTX Losses
Summary
- State-investment company says senior management, an investment team took collective accountability for the ill-fated $275 million investment
Singapore state-investment company Temasek Holdings said it has cut the compensation of its senior management and a team that led it to invest $275 million in crypto exchange FTX, as the country tries to move past an embarrassing loss that drew much local criticism.
Temasek, which is owned by the city-state’s government, last year engaged an independent team to conduct an internal review of its FTX investment, which was made across two funding rounds from October 2021 to January 2022.
The review found no misconduct by an investment team that had recommended Temasek buy a stake in FTX, Temasek Chairman Lim Boon Heng said in a statement Monday. He added that the team and senior management, which ultimately made the decision to invest, “took collective accountability and had their compensation reduced." Temasek didn’t say how much their remuneration was reduced by.
Temasek was one of FTX’s largest external investors with 1% in FTX’s international arm and 1.5% in its U.S. entity as of January 2022. In April last year, Antony Lewis, a director in Temasek’s blockchain team, spoke at a crypto conference in the Bahamas—where FTX is based—and said the company was very proud to invest in the exchange. Lewis also said Temasek had invested in the industry via crypto venture funds before making direct investments in companies.
After FTX’s collapse last November, Temasek said it would write down its entire investment. It also said it had conducted extensive due diligence on FTX over approximately eight months, and had interacted with the exchange’s founder Sam Bankman-Fried.
The loss drew public scrutiny and was questioned by several Singapore lawmakers during a parliamentary session that same month. Deputy Prime Minister Lawrence Wong, who is also finance minister, said at the time that the FTX loss was disappointing and was being taken seriously.
In December, Bankman-Fried was arrested in the Bahamas and charged with eight counts of fraud by U.S. prosecutors. Five more charges were brought against him in March. Bankman-Fried has pleaded not guilty to the charges and asked a New York federal judge to dismiss most of them.
Temasek’s Lim said on Monday that prosecutors and FTX’s key executives have noted that there was fraudulent conduct that was intentionally kept hidden from investors. “Nevertheless, we are disappointed with the outcome of our investment, and the negative impact on our reputation," Lim said.
Singapore once welcomed crypto companies to apply for licenses in the country, but it tightened its grip on the sector last year after the crash of so-called algorithmic stablecoin TerraUSD and the implosion of crypto hedge fund Three Arrows Capital. TerraUSD was run on a blockchain platform managed by Singapore-based Terraform Labs, while Three Arrows was registered in the country. Several other crypto lenders and platforms based in the country also failed and filed for bankruptcy.
Major crypto exchange Crypto.com received in-principle approval from Singapore’s financial regulator last June to offer payment services in the country, but has yet to receive a license, according to the Monetary Authority of Singapore’s database. The regulator hasn’t issued licenses for digital-payment token services for months.
Temasek had roughly $300 billion in net portfolio assets—including stakes in listed and private companies—at the end of March 2022, the most recent data available. More than a third of its portfolio was invested outside of Asia. Other shareholders of FTX whose investments were wiped out by the exchange’s implosion include venture-capital firm Sequoia Capital and the Ontario Teachers’ Pension Plan.
