Temasek (1), a Singapore-based global investment firm with a portfolio valued at $403 billion, has lost interest in seeing how the Chapter 11 bankruptcy case of the FTX cryptocurrency exchange plays out.
The Investment
The multinational conglomerate announced that it would "write down" (2) its $275 million investment, which is made up of a minority stake worth $210 million, or about 1% of the exchange's international business, and a minority stake worth $65 million, or 1.5% of FTX U.S.
According to Temasek on Thursday, In light of FTX's financial position, they have decided to write down our full investment in FTX, irrespective of the outcome of FTX's bankruptcy filing. Over two fundraising rounds began in October 2020 and finished in January 2022, the investment firm invested millions in the Sam Bankman-Fried-led platform.
Crashing In A Last-Ditch Attempt
After initially announcing its intention to fire some of its employees, FTX filed for Chapter 11 bankruptcy last Friday. The Temasek-backed FTX crypto exchange platform (now categorized as a debtor) will be granted the opportunity to conduct a reorganization under this specific chapter of the U.S. Bankruptcy Code (3) to maintain its company and yet have the option to pay its debts to its creditors over time.
Following this incident, there were rumors that SBF and a small number of the business's surviving employees had spent the weekend making calls to prospective "white knight" investors to collect $8 billion to help the company escape its obscene financial predicament. Due to the failure of the endeavor and the fact that its investors must now virtually wait for the outcome of its bankruptcy file, FTX fell once further on this front. Another Asian firm with its headquarters in Japan, Softbank, declared it will write off its $100 stake in FTX as it has given up faith that the exchange can emerge from its current plight.
Temasek Specifies FTX Exposure
Temasek voiced its disappointment over SBF and FTX, noting that their confidence in the organization's leadership, as well as their actions, judgment, and wisdom, looked to have been misplaced. Additionally, Temasek took the initiative to make it clear that its investments in FTX are not made for cryptocurrencies and that it has no direct exposure to digital assets.
The FTX drama's conclusion undoubtedly harmed the crypto market, as it ended up being less wealthy by approximately $150 billion due to Bitcoin and the altcoins suffering dramatic price drops and losing all of their recent gains. When the well-reported fall occurred, the cryptocurrency industry consistently held the $1 trillion threshold in terms of total worth.
