Temasek changes employee pay after failed FTX investment

Singaporean investment firm Temasek Holdings has reduced the compensation of senior management and the investment team responsible for investing in FTX.

An internal review found no misconduct by the investment team, but Temasek’s management still took “collective accountability” and reduced their compensation, according to a statement from the company on Monday.

“With FTX, as alleged by prosecutors and as admitted by key executives at FTX and its affiliates, there was fraudulent conduct intentionally hidden from investors, including Temasek,” commented Chairman Lim Boon Heng, adding:

“We are disappointed with the outcome of our investment, and the negative impact on our reputation.”

The move comes after Temasek wrote down its $275 million investment in FTX last year following the crypto company’s meltdown.

Temasek’s investment in FTX happened after the company announced its plans to go public via a special purpose acquisition company (SPAC) deal in the United States.

However, the deal was put on hold after questions were raised about FTX’s business model. Temasek had said previously that it conducted extensive due diligence on the crypto exchange before investing.

While Temasek currently has no direct exposure to cryptocurrencies, the firm has invested in blockchain firms like Chain, R3, and Digital Currency Group.

The company said its cost of investment in FTX was 0.09% of its net portfolio value of S$403 billion ($304 billion) as of March 31, 2022, and that it currently had no direct exposure to cryptocurrencies.

Temasek is a state-owned investor and one of the largest investors in Asia, with a portfolio worth over $300 billion. The company has stakes in well-known firms such as Alibaba, Tencent, and Zoom, among others.

More recently, Temasek has denied rumors that it had invested $10 million into Array, the developer of the algorithmic currency system based on smart contracts and artificial intelligence.

In a statement earlier this month, the firm addressed the circulating news articles and tweets regarding Temasek’s investment, dismissing them by stating that “this news is incorrect.”

FTX Considers a Reboot after Recovering Over $7 Billion

The push to relaunch FTX has gained momentum due to the platform’s successful recovery of over $7.3 billion in cash and liquid crypto assets.

According to reports, Tribe Capital, a venture firm, is even showing interest in spearheading a $250 million fundraising initiative for the rebranded platform.

Meanwhile, in the latest development in the FTX saga, the disgraced founder of the exchange, Sam Bankman-Fried, has asked a New York federal judge to dismiss most of the criminal charges brought against him by federal prosecutors.

In a filing with the Southern District of New York federal court earlier this week, lawyers of Bankman-Fried argued that several of the charges against him were “dramatic” and turned “civil and regulatory issues into federal crimes.”

Furthermore, the US Internal Revenue Service (IRS) has filed tax claims worth a staggering $44 billion against FTX and its affiliated entities.