FTX: Singapore state fund Temasek pay cut after investment failure

Singapore’s state-owned investment fund Temasek Holdings has announced that it has cut salaries for the staff responsible for investing in crypto exchange FTX, which went bankrupt last year.

Last year, the fund fully wrote off its $275m (£222.8m) investment in FTX.

Prosecutors have accused former FTX CEO Sam Bankman-Fried of orchestrating a “epic” fraud that could cost investors billions of dollars.

Bankman-Fried has pleaded not guilty to the charges.

“The investment team and senior management, who are ultimately responsible for the investment decisions made, have been collectively held accountable and have had their compensation reduced,” Temasek said in a statement Monday.

Sovereign wealth funds also said they were “disappointed by the negative impact on investment results and reputation.”

Mr. Temasek did not disclose how much his salary had been cut.

The company had invested $210 million in FTX and another $65 million in two rounds of funding from October 2021 to January 2022.

Last year, the state fund said it had spent eight months evaluating cryptocurrency exchanges before making these investments. This included a review of audited financial statements that were “shown to be profitable”.

As of March 2022, Temasek was valued at over S$403 billion ($298.1 billion, £241.3 billion), so the money put into the cryptocurrency platform was only a small part of the investment.

But Singapore’s Deputy Prime Minister Lawrence Wong said in December that Temasek’s FTX losses had damaged the fund’s reputation.

Wong, who is also the country’s finance minister, added: “The fact that other major global institutional investors such as BlackRock and Sequoia Capital are also investing in FTX does not alleviate this problem.” .

A sovereign wealth fund is like a state savings account and typically invests in stocks, currencies, real estate and other assets.

FTX, valued at $32 billion a year ago, filed for bankruptcy protection in November. It is estimated that $8 billion of client funds have been lost.

Bankman-Fried, who co-founded FTX in 2019, is one of the most high-profile figures in the cryptocurrency industry, known for his political ties, celebrity endorsements, and bailouts of other struggling companies. ing.

In December, prosecutors announced eight criminal charges against Bankman-Fried, including wire fraud, money laundering and campaign finance violations. Five more charges were levied against him in March. Financial regulators have also filed complaints against Bankman-Fried.

FTX co-founder Gary Wang and former Alameda president Caroline Ellison have also been indicted for their involvement in the company’s demise.

Bankman-Fried was arrested in the Bahamas in December, where he lived and was based at FTX.