FTX: Singapore's Temasek slashes salaries following a failed investment

The Singapore state-owned investment fund Temasek Holdings has reduced the salaries of the employees responsible for its failed investment in the FTX cryptocurrency exchange.

In November, the fund wiped off its entire investment of $275 million (£222.8 million) in FTX. Former FTX CEO Sam Bankman-Fried is accused by prosecutors of orchestrating an "epic" fraud that could cost investors billions of dollars. Mr. Bankman-Fried has entered a not-guilty plea.

On Monday, Temasek announced in a statement that the senior management and investment team, that are ultimately accountable for the investment decisions made, have collectively assumed responsibility and had their compensation decreased. In addition, the sovereign wealth fund was dissatisfied with the results of our investment and the damage to our reputation.

Temasek did not specify the salary reduction amount. In two funding phases between October 2021 and January 2022, it invested a total of $210 million and then $65 million in FTX.

Prior to making these investments, the state-owned fund stated a year ago that it had spent eight months evaluating the cryptocurrency exchange. The evaluation included a review of an audited financial statement. The review showed it to be profitable. As of March 2022, Temasek was worth more than S$403 billion ($298.1 billion; £241.3 billion), so its investments in the cryptocurrency platform represented a modest portion of its total holdings.

Lawrence Wong, Singapore's deputy prime minister, stated in December that Temasek's losses in FTX had damaged the fund's reputation. Mr. Wong, who is also the country's finance minister, added that the fact that BlackRock and Sequoia Capital have also invested in FTX does not mitigate this.

Similar to a country's savings account, sovereign wealth funds typically invest in stocks, currencies, real estate, and other assets. In November, FTX, which was worth $32 billion a year ago, filed for bankruptcy protection. It is estimated that $8 billion in client funds were missing.

Mr. Bankman-Fried, who co-founded FTX in 2019, was one of the most prominent figures in the cryptocurrency industry, renowned for his political connections, celebrity endorsements, and bailouts of other failing companies. US federal prosecutors accuse Mr. Bankman-Fried of plundering billions of dollars from FTX users in order to pay off debts at his other company, Alameda Research, and make other investments.

In December, Mr. Bankman-Fried was charged with eight criminal offenses, including wire fraud, money laundering, and campaign finance violations. In March, five additional charges were brought against him. Additionally, claims have been lodged against Mr. Bankman-Fried by financial regulators.

Caroline Ellison, the former CEO of Alameda and Gary Wang, the co-founder of FTX have also been accused for their alleged roles in the collapse of the company. Mr. Bankman-Fried was detained in the Bahamas, where he resided and where FTX was headquartered, in December.

In an interview conducted just days before his arrest, he stated that he did not commit fraud on purpose, he did not believe that he had committed deception. He also mentioned that he did not wish for any of this to occur.