The Deputy Prime Minister of Singapore expressed his disappointment with the FTX loss

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Last Updated on November 30, 2022 by Bitfinsider

According to Singapore’s Deputy Prime Minister and Minister of Finance, Lawrence Wong, Temasek’s investment loss of $275 million as a result of the failure of cryptocurrency exchange FTX was “disappointing” and negative for the country.

While delivering a speech to Parliament on Wednesday, Wong stated that the losses sustained by Singapore’s sovereign wealth fund were “being taken seriously.”

However, he stressed that the failure of investments is not evidence that the governance structure is ineffective. “Rather, it is inherent to the processes of investing and risk-taking,” the author writes.

Midway through November, Temasek made the announcement that it would be “writing down the value of its investment in FTX to zero,” and that this decision would be made “regardless of the result of FTX’s bankruptcy protection case.” Temasek has also said that it does not have any direct exposure to cryptocurrencies at the present time.

According to the bankruptcy petition, FTX has more than 100,000 creditors and liabilities that vary anywhere from $10 billion to $50 billion.

According to Wong, “What transpired with FTX has consequently led Temasek to not only suffer a financial loss but also damage to their brand.”

“Temasek recognizes this and has issued a comprehensive statement to explain its due diligence process and the circumstances leading to its investment in FTX,” he said, adding that an internal review is being conducted to study what went wrong with the FTX deal and how to improve the process. “Temasek recognizes this and has issued a comprehensive statement to explain its due diligence process and the circumstances leading to its investment in FTX,” he said.

He stated that the government does not dictate standards on the distribution of certain assets or asset classes, whether for cryptocurrencies or other assets. This applies to all types of assets.

According to what he stated, in the end, the government looks to the boards and management teams to formulate investment plans that are in line with the government’s overall risk tolerance.

In response to the inquiries posed by members of parliament, Wong stated, “What is important is that our investment entities take lessons from each failure and success, and continue to take well-judged risks in order to achieve good overall returns over the long term.” (What is important is that our investment entities take lessons from each failure and success.)

“By doing things in this manner, we will be able to keep building up our national reserves and ensuring a reliable income stream to pay governmental services for an extended period of time,”

He brought up the fact that Temasek’s early-stage portfolio, as of March, had earned an internal rate of return in the mid-teens over the course of the previous decade, which was higher than the norm for the sector. This was despite the fact that the FTX investment had been written down.

Because the net investment returns of Singapore’s reserves are “connected to the total projected long term returns of our investment companies and not to individual investments,” the FTX loss will not have any effect on those returns either.


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Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.

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