FTX filed for bankruptcy in the US on Friday (Nov 11), leading to the possibility that all of its investors—including Singapore’s own Temasek Holdings—will lose everything they’ve put into the cryptocurrency exchange giant.
Until a few short weeks ago, FTX was the third biggest cryptocurrency exchange around the globe, and had been worth nearly S$44 billion just last January.
The net worth of FTX founder, Sam Bankman-Fried, quickly plunged from US$26.5 billion (S$36.4 billion) to under a billion USD.
Bankman-Fried announced that FTX had filed for bankruptcy via Twitter on Friday, telling customers he was sorry and that “Hopefully things can find a way to recover.” He has since resigned as CEO.
2) I'm really sorry, again, that we ended up here.
Hopefully things can find a way to recover. Hopefully this can bring some amount of transparency, trust, and governance to them.
Ultimately hopefully it can be better for customers.
— SBF (@SBF_FTX) November 11, 2022
But aside from customers, the situation is dire for investors such as Temasek Holdings, owned by the government of Singapore, and had been, until October of last year, under the leadership of Madam Ho Ching, the wife of Prime Minister Lee Hsien Loong.
Mdm Ho stepped down in Oct 2021 and was succeeded by Dilhan Pillay Sandrasegara as chief executive officer.
On Friday, Forbes published a list of FTX investors who have the most to lose if the company can’t be saved.
It says that Temasek has a one per cent stake in FTX and that its estimated amount invested is US$205 million (S$281 million).
At its peak last January, the value of this investment had been US$320 million (S$439 million).
Forbes added that Temasek is FTX’s “second-largest outside investor on the capitalization table, with 7 million shares. The $297 billion (assets) business, which owns big stakes in Singapore’s DBS Group and Singapore Airlines, invested in all three of FTX’s major funding rounds.”
“We are aware of the developments between FTX and Binance, and are engaging FTX in our capacity as shareholder,” Temasek told Reuters in an email.
Along with Temasek, other big FTX investors who have likely lost everything due to the company’s bankruptcy are SoftBank Group’s Vision Fund, Sequoia Capital, the Ontario Teachers’ Pension Plan, Tiger Global Management and Lightspeed Venture Partners.
On Nov 9, Sequoia Capital wrote that its equity in FTX was at $0, for a loss of US$214 million (S$294 million), but assured investors that this represented only a small portion of its portfolio.
Forbes reported that FTX’s recent S$44 billion valuation has now gone “up in smoke.”
Reports say that the company’s bankruptcy will be one of the most complex in years, as it is likely to take months for the more than 100,000 creditors on its filing to learn what they are owed.
/TISG
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