SINGAPORE — According to an exclusive report by Forbes, Temasek Holdings has US$205 million invested into cryptocurrency platform FTX which has filed for bankruptcy in the United States.
FTX Group announced in a statement on Friday (11 Nov) that it filed for US’ Chapter 11 bankruptcy proceedings, adding it has begun an “orderly process to review and monetize assets for the benefit of all global stakeholders.”
The filing comes after the world’s biggest cryptocurrency platform Binance agreed to buy its rival earlier this week but backed out, leading market players to consider possible regulator responses.
Forbes’ report noted that FTX became a huge draw for venture capitalists eager to get in on the Bitcoin boom as the cryptocurrency exchange grew in size.
“In June 2021, FTX raised $1 billion at an $18 billion valuation from venture investors such as Paradigm, SoftBank and Sequoia Capital. Three months later, FTX brought in a $421 million haul, pushing its valuation to $25 billion, from investors like Singapore-government owned investment firm Temasek, Tiger Global Management and the Ontario Teachers’ Pension Plan. By January of this year, crypto prices were on the decline, but FTX charged ahead. Investors, many of whom had also pumped money into the earlier rounds, put another $400 million into FTX–at a $32 billion valuation.”
The Singapore sovereign wealth fund (SWF) is said to be the second-largest outside investor on the capitalization table, with 7 million shares for its estimated investment sum of US$205 million
It invested in all three of FTX’s major funding rounds — the Series B, Series B extension and Series C, in October last year and early January this year.
The investments into FTX took place just after Mdm Ho Ching stepped down on 1 Oct last year as Temasek Holdings’ CEO and executive after helming the SWF for 18 years.
With its $320 million stake on the brink of being worthless, a Temasek spokesperson told Reuters on Wednesday that they were “aware of the developments” and were “engaging FTX in our capacity as shareholder.”
Following the news of the collapse of the bailout from Binance, Sequoia Capital which is said to have invested an estimated sum of US$200 million, wrote to its partners that it is marking its investment into FTX down to $0.
Here is the note we sent to our LPs in GGFIII regarding FTX. pic.twitter.com/Cgp1Yxk1pz
— Sequoia Capital (@sequoia) November 10, 2022
Binance earlier said on Twitter that it decided not to pursue the potential acquisition of FTX just after a day of signing a non-binding letter of intent for a full acquisition.
“In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” the company tweeted.
The company also mentioned recent press reports about mismanagement of client funds and investigations by US regulators.
As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of https://t.co/FQ3MIG381f.
— Binance (@binance) November 9, 2022
Binance owner, Zhao Changpeng said on his Twitter that Binance had about $2.1 billion worth of FTT and BUSD, its own stablecoin.
“Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books,” he said.
