Singapore state-owned investment fund Temasek Holdings has cut the pay of staff responsible for its investment in cryptocurrency exchange FTX, which collapsed last year.
FTX’s former chief executive Sam Bankman-Fried was once nicknamed the “King of Crypto”. He is accused of orchestrating an “epic” fraud which may cost investors billions of dollars. He has pleaded not guilty to the charges.
Temasek said in a statement on Monday that the investment team and senior management, who are ultimately responsible for the investment decisions made, took collective accountability and had their compensation reduced. The fund said it was “disappointed with the outcome of our investment, and the negative impact on our reputation”.
Before making the investments, Temasek had spent eight months evaluating the cryptocurrency exchange, including the review of an audited financial statement which showed it to be profitable. As of March 2022, Temasek was worth more than S$403bn and the money it had put into the cryptocurrency platform accounted for a small percentage of its investments.
Singapore’s deputy prime minister Lawrence Wong said in December that Temasek’s losses in FTX had caused damage to the fund’s reputation.
FTX filed for bankruptcy protection in November. It has been estimated that $8bn of customer’s funds was missing. Mr Bankman-Fried was arrested in December in the Bahamas, where he lived and FTX was based.
Prosecutors have announced eight criminal charges against Mr Bankman-Fried, including wire fraud, money laundering and campaign finance violations. Financial regulators have also brought claims against Mr Bankman-Fried.
Temasek did not indicate how much salaries were reduced by. FTX was valued at $32bn a year ago. It had invested $210m and then another $65m in FTX in two funding rounds between October 2021 and January 2022.
In December, another five charges were levied against Mr Bankman-Fried. FTX co-founder Gary Wang and Caroline Ellison, the former head of Alameda, have also been charged over their alleged roles in the company’s collapse.
Sovereign wealth funds are like a savings account for a country, and they typically invest in shares, currencies, property or other assets. Despite other leading global institutional investors like BlackRock and Sequoia Capital also investing in FTX, the damage to Temasek’s reputation was already done.
The fund said that it had taken collective accountability and had their compensation reduced. Despite the losses, Temasek said it is continuing to invest in digital assets.
