Singapore state-owned funding agency Temasek revealed that it discovered no important purple flags at FTX Monetary earlier than deciding to take a position $275 million within the now-defunct crypto trade in 2021, regardless of eight months of due diligence.
Like lots of FTX’s a couple of million collectors, the Singapore-based agency has been blindsided by FTX’s collapse and the continued fallout, saying in a Nov. 17 submit:
“The thesis for our funding in FTX was to spend money on a number one digital asset trade that gives us with a price revenue mannequin and protocol agnostic and market impartial publicity to crypto markets with no buying and selling or steadiness sheet danger.”
Earlier than the agency determined to take a position $210 million for a 1% stake in FTX Worldwide and a minority 1.5% stake in its United States-based unit, FTX US, in two funding rounds, it claims it has performed “in depth Due Diligence” has been performed. From February to October 2021.
In response to Temasek it reviewed FTX’s audited monetary statements, examined regulatory dangers related to crypto monetary market service suppliers, and sought recommendation from exterior authorized and cyber safety consultants, together with a authorized and regulatory overview for the funding.
As one other precaution, the agency stated it interviewed individuals aware of FTX, together with staff, business individuals and different traders.
“We imagine that our due diligence procedures can mitigate a number of the dangers, however it’s not sensible to eradicate all dangers,” the agency stated.
“It’s clear from this funding that the views that we could place on Sam Bankman-Fried’s actions, judgment and management, fashioned from our interactions with him and expressed in our discussions with others, could seem like misplaced.”
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In response to Temasek, it estimates that its funding in FTX was 0.09% of its portfolio worth of greater than $293 billion, and not one of the disclosed investments contain crypto, regardless of rumors on the contrary, the agency says that its “cryptocurrency There isn’t a direct danger.
“We proceed to acknowledge the potential of blockchain functions and decentralized applied sciences to remodel sectors and create a extra related world. However latest occasions have demonstrated what we’ve acknowledged earlier than – the genesis of the blockchain and crypto business and the myriad alternatives in addition to the numerous dangers concerned.