Temasek cuts employee pay behind failed $275 million bet on FTX

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Singaporean state-owned investor Temasek has cut the pay of staff responsible for its botched $275 million investment in FTX, Sam Bankman-Fried’s cryptocurrency exchange that collapsed last year.

Temasek, one of the world’s largest investors, said he was “disappointed” by the investment and the “negative impact on our reputation” after being criticized for backing the start-up. The investment constituted 0.09% of its portfolio of 403 billion Swedish dollars (298 billion US dollars).

“Although there was no misconduct by the investment team in reaching their investment recommendation, the investment team and senior management, who are ultimately responsible for the investment decisions made, have taken collective responsibility and they reduced their compensation,” Temasek said on Monday.

The statement concluded that of Temasek business review, which launched in November 2022, the same month FTX filed for bankruptcy. The Singaporean investor has been hit with a rare public backlash after the details behind his botched bet went public.

Temasek defended his “eight-month due diligence” process, but critics questioned whether even background checks had been done in the start-up, which at one point was valued at $40 billion when Bankman-Fried acted as actually from face of the cryptocurrency industry. Temasek described his trust in former chief executive Bankman-Fried as “misplaced”.

Lawrence Wong, Singapore’s deputy prime minister, told parliament last year that Temasek’s losses were “disappointing” and caused damage to the city-state’s reputation. Ho Ching, the former Temasek chief who is the wife of Singaporean leader Lee Hsien Loong, called the loss of the fund “the egg on our face”.

Temasek’s failed gamble has further undermined confidence in Singapore’s ability to regulate the digital assets sector. Singapore has encouraged cryptocurrency companies to start operations locally and has allowed both retail and institutional investors to trade in the risky asset class.

But a series of crypto failures linked to the city-state in 2022, including the collapse of hedge fund Three Arrows Capital and crypto platform Hodlnaut, have put the city-state under scrutiny.

Experts warned the report could fuel further criticism because it didn’t offer many details on the matter FTP extension investments and the due diligence process.

“That remains to be seen, but there is a risk that such a superficial report could – rightly or wrongly – stoke public dissatisfaction rather than appease it,” said Kelvin Low, a law professor at the National University of Singapore.

Temasek, whose funds come largely from the return on its investments, has doubled the value of its portfolio to S$403 billion over the past decade according to the latest public information, largely thanks to its big bets on China and technology . He has made a number of investments in crypto and blockchain companies globally, but claims his overall exposure to the sector is minimal.