At least three Singaporean companies are linked to FTX and collapsed along with FTX, once the world’s third-largest crypto exchange, valued at US$32 billion (S$43 billion). A former director of two of these Singaporean firms is the co-founder and former chief executive officer (CEO) of FTX, Samuel Benjamin Bankman-Fried, who faces multiple charges over the FTX scandal, which lost customers billions of dollars.
Bankman-Fried is expected to appear in a US court in January and faces eight criminal charges by US prosecutors, plus several civil charges by US regulators. On December 13, the US Commodity Futures Trading Commission (CFTC) filed fraud charges against Bankman-Fried, FTX Trading operating through FTX.com and Alameda Research LLC.
In a press release, the CFTC accused Bankman-Fried and these companies of causing FTX customers to lose over US$8 billion. On November, 6 per cent of FTX customers were in Singapore, according to a Chapter 11 bankruptcy filing on FTX.
If convicted, the 30-year-old may spend the rest of his life in a US prison. Bankman-Fried has admitted to mistakes but denied he committed any crime.
“As defendants touted and marketed FTX.com as a model digital commodity asset platform, defendants were committing fraud to the detriment of US investors and to the credibility of the digital asset markets,” alleged CFTC Acting Director of Enforcement Gretchen Lowe. “We will work tirelessly to use the full scope of our enforcement authority to hold such fraudsters accountable.”
Bankman-Fried was formerly a director of two Singaporean companies, FTX Digital Holdings (Singapore) Pte. Ltd. and FTX Products (Singapore) Pte. Ltd., Singapore corporate records show. On November 11, these two Singaporean firms, along with FTX Trading, Alameda and 98 other companies, filed for Chapter 11 bankruptcy protection in the US, said Kroll, a US risk consultancy handling the claims of FTX creditors.
FTX Digital Holdings (Singapore)
FTX Digital Holdings (Singapore) was founded on 24 August 2021 to operate a digital platform for users to trade digital payment tokens, according to Singapore corporate records. It had a paid-up capital of US$2.25 million (S$3 million), which suggests it probably had substantial operations and assets. Bankman-Fried was appointed a director of this firm on 24 August 2021 when it was established.
Two other directors of FTX Digital Holdings (Singapore) have Singapore addresses registered in corporate records, namely Constance Wang Zhe, a Chinese national, and Matthew Avery Heller, a US citizen.
According to her LinkedIn account, Wang was the chief operating officer (COO) of FTX from March 2019 to November 2022 and co-CEO of an FTX subsidiary, FTX Digital Markets, from January 2022 to September 2022. During her tenure in these two companies, she was based in the Bahamas with the top management of FTX. In Singapore, Wang worked for Credit Suisse from August 2016 to July 2018, where part of her job involved due diligence. She graduated in 2016 with a degree in finance and business with upper second-class honours from the National University of Singapore (NUS), according to her LinkedIn account.
Heller was CEO of FTX Digital Holdings from November 2021 to November 2022, according to his LinkedIn account. Prior to that, he worked for Google in Singapore for nine years and 10 months, where he was the US search engine giant’s director of government programmes, strategy and outreach from January 2020 to July 2021.
FTX Digital Holdings (Singapore) was wholly owned by FTX Trading, which was incorporated in Antigua and Barbuda, according to Singapore corporate records. FTX Trading owned and operated FTX.com, a crypto exchange in the Bahamas which served customers outside the US. In a press release on 20 July 2021, FTX Trading said it had raised US$900 million from over 60 international investors who valued the company at US$18 billion. These investors included Sequoia Capital, a legendary Silicon Valley venture capital firm, and Softbank, a Japanese conglomerate.
In November, Temasek announced it would write off its entire US$275 million investment in FTX. The Singapore sovereign wealth fund is conducting an internal investigation into its failed investment in FTX.
FTX Products (Singapore)
FTX Products (Singapore) was founded on 3 February 2020 as a digital platform for users to trade digital payment token derivatives, according to Singapore corporate records. Bankman-Fried was appointed its director on 22 August 2021. Wang was appointed the firm’s director on 3 February 2020 when it was founded. FTX Products (Singapore) had a paid-up capital of US$1 and was wholly owned by FTX Trading.
Both FTX Digital Holdings (Singapore) and FTX Products (Singapore) shared the same address at 11 Marina Bay Financial Centre on 8 Marina Boulevard, which is located in an upmarket business district.
Liquid Securities Singapore
Liquid Securities Singapore Pte. Ltd. was incorporated in Singapore on 3 January 2019 to engage in security dealings and commodity contracts brokerage, according to Singapore corporate records. It had a paid-up capital of US$1 and was wholly owned by a Japanese fintech company, Liquid Group. Liquid Securities Singapore went under Chapter 11 bankruptcy protection on November 11. Liquid Securities Singapore had two directors, namely a Japanese man named Kariya Kayamori and a Singapore citizen named Siau Kuei Lian.
Around March, FTX Trading acquired Liquid Group and all its subsidiaries as part of FTX’s plan to target institutional and retail investors in Japan and global markets, said Liquid Group’s press release.
Wang, Heller, Siau and Kayamori have not been charged with any offence. Just because fraud is suspected in FTX does not mean the three Singaporean FTX-linked firms are implicated.
Toh Han Shih is chief analyst of Headland Intelligence, a Hong Kong risk consulting firm.