FTX: Singapore state fund Temasek slashes wages after failed investment

Singaporean public investment fund Temasek Holdings has announced that it has cut the salaries of staff responsible for its investment in cryptocurrency exchange FTX, which collapsed last year.

In November, the fund canceled all of the $275m (£222.8m) it had invested in FTX.

Prosecutors have accused former FTX chief executive Sam Bankman-Fried of orchestrating an “epic” fraud that could cost investors billions of dollars.

Mr. Bankman-Fried has pleaded not guilty to the charges.

“The investment team and senior management, who are ultimately responsible for the investment decisions made, have taken collective responsibility and have had their compensation reduced,” Temasek said in a statement Monday.

The sovereign fund also said it was “disappointed with the result of our investment and the negative impact on our reputation”.

Temasek did not say how much wages have been reduced.

He had invested $210 million and then another $65 million in FTX in two funding rounds between October 2021 and January 2022.

Last year, the public fund said that before making these investments, it had spent eight months evaluating the cryptocurrency exchange. This included reviewing an audited financial statement “which showed it was profitable”.

As of March 2022, Temasek was worth over 403 billion Singapore dollars ($298.1 billion; £241.3 billion), so the money he invested in the cryptocurrency platform represented a small percentage of his investments.

However, Singapore’s Deputy Prime Minister Lawrence Wong said in December that Temasek’s losses in FTX had hurt the fund’s reputation.

“The fact that other top global institutional investors like BlackRock and Sequoia Capital have also invested in FTX doesn’t mitigate that,” added Wong, who is also the country’s finance minister.

SWFs are like a savings account for a country and they typically invest in stocks, currencies, property or other assets.

FTX, which a year ago was valued at $32 billion, filed for bankruptcy in November. It was estimated that $8 billion in customer funds were missing.

Mr. Bankman-Fried, who co-founded FTX in 2019, was one of the most high-profile figures in the cryptocurrency industry, known for his political ties, celebrity endorsements and bailouts of other companies in trouble.

In December, prosecutors announced eight charges against Mr. Bankman-Fried, including wire fraud, money laundering and campaign finance violations. Five other charges were brought against him in March. Financial regulators have also filed a complaint against Mr. Bankman-Fried.

FTX co-founder Gary Wang and Caroline Ellison, the former head of Alameda, have also been charged for their alleged role in the company’s collapse.

Mr. Bankman-Fried was arrested in December in the Bahamas, where he lived and where FTX was based.