Singaporean government-owned investment firm Temasek has suffered much more than financial losses from investing in FTX, according to Deputy Prime Minister Lawrence Wong.
Wong, who is also finance minister, believes that Temasek’s $275 million investment in FTX has caused significant damage to the company’s reputation. The official addressed mounting criticism of Temasek’s exposure to FTX at a meeting of Parliament on November 27, according to a report by the South China Morning Post.
The prime minister stressed that FTX’s collapse was the result of a “very poorly run company” as well as possible fraud and embezzlement from users.
“What happened with FTX, therefore, has caused not only financial loss to Temasek, but also reputational damage,” the official said, adding that Temasek has launched an internal investment review to improve processes and extract lessons for the future.
Wong stressed that investments from other large institutional investors such as BlackRock and Sequoia Capital do not mitigate such reputational damage.
Temasek, which is wholly owned by the finance minister but operates independently, said on November 17 that it was downgrading its entire $275 million investment in FTX.. The amount represented just 0.09% of Temasek’s $403 billion portfolio as of March 2022. According to Wong, FTX-related losses would not affect investors’ contribution to net investment returns, which is the amount of government revenue from interest earned on its reserves.
Aside from addressing concerns around FTX and TemasekWong also argued that Singapore had no ambition to become a cryptocurrency hub, but instead seeks to be a “responsible and innovative digital asset player.”
“It has been shown that some of the earlier optimism about blockchain technologies was not […] well located. I think there’s a more realistic sense of what these technologies can do.” Wong declared. He also emphasized that crypto investors should be prepared to lose all of their cryptocurrency investments, adding: “No amount of regulation can eliminate this risk.”
Despite Temasek reducing its investment in FTX, the state-owned company apparently still has investments in many other platforms in the industry. Despite not directly investing in cryptocurrencies, Temasek is known for participating in multiple investment rounds for large cryptocurrency companies, including Binance and Amber Group.
In August, Temasek also reportedly led a $110 million strategic funding round for metaverse and blockchain gaming giant Animoca Brands.
Temasek did not immediately respond to Cointelegraph’s request for comment.
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