No pink flags at FTX regardless of 8 months of ‘intensive due diligence’ — Temasek

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Singapore’s state-owned funding agency Temasek revealed regardless of eight months of due diligence in 2021, it did not discover any important pink flags in FTXs financials earlier than deciding to speculate $275 million into the now-bankrupt crypto change.

Like lots of FTX’s more than one million creditors, the Singapore-based agency has been left blindsided by the collapse of FTX and the ongoing fallout, saying in a Nov. 17 post:

“The thesis for our funding in FTX was to spend money on a number one digital asset change offering us with protocol agnostic and market impartial publicity to crypto markets with a payment earnings mannequin and no buying and selling or steadiness sheet threat.”

Earlier than the agency determined to speculate $210 million for a stake of 1% in FTX Worldwide and $65 million for a minority 1.5% stake in its United States-based entity FTX US throughout two funding rounds, it claims to have performed “intensive due diligence” from Feb. to Oct. 2021.

In line with Temasek it reviewed FTX’s audited monetary statements, investigated the related regulatory risk with crypto monetary market service suppliers, and sought recommendation from exterior authorized and cybersecurity specialists, with a authorized and regulatory assessment undertaken for the investments.

As one other precaution, the agency stated it interviewed individuals aware of FTX, together with workers, trade members, and different traders.

“We acknowledge that whereas our due diligence processes could mitigate sure dangers, it’s not practicable to get rid of all dangers,” the agency stated.

“It’s obvious from this funding that maybe our perception within the actions, judgment, and management of Sam Bankman-Fried, fashioned from our interactions with him and views expressed in our discussions with others, would seem to have been misplaced.”

Associated: FTX’s ongoing saga: Everything that’s happened until now

In line with Temasek, it estimates its funding in FTX was 0.09% of its portfolio worth of greater than $293 billion, and not one of the disclosed investments entails crypto, regardless of rumors on the contrary, the agency says it has “no direct publicity in cryptocurrencies.”

“We proceed to acknowledge the potential of blockchain functions and decentralized applied sciences to remodel sectors and create a extra related world. However current occasions have demonstrated what we’ve recognized beforehand – the nascency of the blockchain and crypto trade and the innumerable alternatives in addition to important dangers concerned.”