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Singapore State Fund Temasek’s Failed Investment Leads to Pay Cuts

According to reports, Temasek Holdings, a state-owned investment fund headquartered in Singapore, has cut the salaries of the employees responsible for its investment in the cryptocurrency exchange FTX. The reduction in salaries follows FTX’s collapse last year, which resulted in Temasek losing its entire investment of $275 million (£222.8 million) in the exchange. 

While the exact amount of the salary reduction is unknown, it is worth noting that Temasek had invested a total of $210 million and an additional $65 million in FTX in two separate funding rounds between October 2021 and January 2022.

Temasek does Pay Cuts

The underperformance of the investment platform had a negative impact on the reputation of the sovereign wealth fund. Nevertheless, as of March 2022, Temasek’s total value exceeded S$403 billion, indicating that the funds invested in the cryptocurrency platform were only a small portion of its overall investments.

Temasek has carried out an internal investigation and concluded that there was no indication of misconduct by the investment team in their investment proposal. The investment team and senior management, who hold the final responsibility for investment decisions, have acknowledged shared accountability and had their compensation reduced.

Temasek’s image has been tarnished by the unprofitable investment in FTX. Being a major sovereign wealth fund worldwide, Temasek has a reputation for making astute investment decisions. To exhibit its dedication to preserving its reputation, on Monday, the company had decided to cut the wages of the employees accountable for the investment’s collapse. 

The FTX Collapse

FTX had a valuation of $32 billion last year. However, in November, it had to file for bankruptcy protection due to the disappearance of customer funds worth approximately $8 billion. Mr. Bankman-Fried, one of FTX’s co-founders in 2019, was a well-known figure in the industry. He had strong political connections, received support from celebrities, and had previously rescued other struggling companies.

US fed prosecutors have leveled accusations against Mr. Bankman-Fried for allegedly using billions of dollars from FTX users to pay off debts at Alameda Research and for investing in other ventures. 

In December 2022, prosecutors unveiled eight criminal charges against him, including wire fraud, money laundering, and campaign finance violations. Furthermore, Five additional charges were filed against him in March. Moreover, financial regulators have also made claims against Mr. Bankman-Fried.