Singapore’s condition-owned investment firm Temasek revealed despite eight several weeks of research in 2021, it did not find any significant warning flags in FTXs financials before choosing to invest $275 million in to the now-bankrupt crypto exchange.
“The thesis for the purchase of FTX was to purchase a number one digital asset exchange supplying us with protocol agnostic and market neutral contact with crypto markets having a fee earnings model with no buying and selling or balance sheet risk.”
Prior to the firm made the decision to take a position $210 million for any stake of just onePercent in FTX Worldwide and $sixty five million for any minority 1.5% stake in the U . s . States-based entity FTX US across two funding models, it states have conducted “extensive due diligence” from February. to March. 2021.
Based on Temasek, it reviewed FTX’s audited fiscal reports, investigated the connected regulatory risk with crypto financial market providers and searched for advice from exterior legal and cybersecurity specialists, having a legal and regulatory review carried out for that investments.
As the second precaution, the firm stated it interviewed people acquainted with FTX, including employees, industry participants along with other investors.
“We notice that while our research processes may mitigate certain risks, it’s not practicable to get rid of all risks,” the firm stated.
“It is obvious out of this investment that possibly our belief within the actions, judgment, and leadership of Mike Bankman-Fried, created from your interactions with him and views expressed within our discussions with other people, would have been misplaced.”
Based on Temasek, it estimates its purchase of FTX was .09% of their portfolio value in excess of $293 billion, and no disclosed investments involves crypto, despite rumors on the contrary, the firm states it’s “no subjection in cryptocurrencies.”
“We still recognize the potential for blockchain applications and decentralized technologies to change sectors and make up a more connected world. But recent occasions have shown what we should have identified formerly – the nascency from the blockchain and crypto industry and also the countless possibilities in addition to significant risks involved.”