How the FTX debacle made this company wary of crypto

• Temasek’s Chief Investment Officer Rohit Sipahimalani said expressed his sentiments against crypto recently.
• The firm has still not been able to recover from its failed investment worth $275 million in FTX.

Singapore’s wealth giant Temasek is not interested in cryptocurrency investments due to regulatory uncertainty, Chief Investment Officer Rohit Sipahimalani told CNBC.

The state-owned conglomerate’s crypto investment worth $275 million was lost when the Bahamas-based crypto exchange FTX collapsed last year.

This stance suggests that the wealth fund has still not recovered from the disastrous event.

Singapore’s Deputy Prime Minister Lawrence Wong had criticized Temasek when FTX failed. He had remarked that the state investor suffered “reputational damage” due to its failed investment in FTX.

Sipahimalani said in the CNBC interview that losses are unavoidable with early-stage investment, so the firm has a 6% cap on such investments in its portfolio.

We are well aware of the high-profile tussle between the regulatory authorities and crypto firms in the U.S. It took a turn for the worse when the Securities and Exchange Commission (SEC) charged two leading global exchanges, Binance [BNB] and Coinbase [COIN], with securities violations last month. Financial regulators in Europe are working to implement the Markets in Crypto Assets (MiCA) regulation by 2024.

Sipahimalani, however, added that if regulators implement a comprehensive regulatory framework on the crypto industry, the corporation will reconsider its position. He said,

“If you have the right regulatory framework, and we are comfortable with it, and you have the right investment opportunity, there’s no reason for us to not to look at it.”

FTX affected Temasek severely

Temasek recently posted the results of the preceding financial year that ended 31 March. It turns out that the company recorded in 2023 its worst returns in seven years. Temasek posted a 5.07% decline in its one-year total shareholder return.

Temasek’s net portfolio value came in at 382 billion Singaporean dollar ($287 billion). The figure stood at S$403 billion a year ago.

The firm also recorded a net $6 billion net group loss, which was its first in at least a decade.