Temasek, a Singaporean conglomerate, is currently uninterested in cryptocurrency investments due to regulatory uncertainty and a previous loss.
Key Points
- Temasek’s CEO cites regulatory uncertainty and a bad experience with FTX as reasons for the company’s lack of interest in cryptocurrency investments.
- Temasek would reconsider its stance if appropriate regulations and investment opportunities arise.
- The Monetary Authority of Singapore plans to impose restrictions on digital asset organizations to protect retail investors.
Rohit Sipahimalani, CEO of Temasek, a Singaporean state-owned conglomerate, has stated that the company is currently not interested in cryptocurrency investments due to the lack of regulatory clarity in the sector. He cited a bad experience with the digital asset sector, referring to the $275 million loss suffered when FTX collapsed.
Singapore’s state investment firm Temasek says it’s not looking to invest in crypto firms amid current regulatory uncertainties. Temasek’s failed investment in FTX led to some employees cutting salaries as punishment. https://t.co/sVZzTg2mxM
— Wu Blockchain (@WuBlockchain) July 11, 2023
A Possible Re-Entry With Appropriate Rules
In a recent interview, CEO Sipahimalani emphasized the regulatory uncertainty surrounding the cryptocurrency industry, making it difficult for Temasek to consider further investments in the ecosystem. However, he also mentioned that if the right regulatory framework is implemented and suitable investment opportunities arise, Temasek would reconsider its position.
The Monetary Authority of Singapore has taken steps to protect local crypto participants by planning to ban digital asset organizations from offering lending and staking services to retail investors. It may also require such firms to hold customers’ assets in a designated trust by the end of 2023.
Temasek invested $275 million in FTX as part of its early-stage strategy to explore new disruptive technologies. The company conducted proper due diligence and proceeded with the investment based on FTX’s good technology, market share growth, and willingness to engage with regulators.
Taking Responsibility
Temasek‘s unsuccessful interaction with FTX has damaged the conglomerate’s reputation. As a result, the team and senior manager responsible for approving the investment have taken full responsibility and had their annual compensations reduced. The exact amount of the deduction and whether other employees’ bonuses or salaries were affected have not been disclosed.
Other companies that suffered losses due to investing in FTX include BlackRock, the world’s largest asset manager, Sequoia Capital, a venture capital firm, Paradigm, a crypto technology investment company, Softbank, a Japanese company, and many more.
