Temasek, a Singaporean state fund, reduces salaries

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Sam Bankman-Fried, a co-founder of FTX, had the moniker “King of Crypto” at one point. Image source: GETTY IMAGES

Temasek Holdings, a state-owned investment company in Singapore, claims it has reduced the compensation of employees in charge of its investment in the defunct cryptocurrency exchange FTX.

The fund made the decision to totally sell up its $275 million (£222.8 million) stake in FTX in November.

Sam Bankman-Fried, the former CEO of FTX, is accused by the prosecution of orchestrating a massive fraud scheme that had the potential to cost investors billions of dollars.

In response to these accusations, Mr. Bankman-Fried has submitted a plea of not guilty.

Temasek admitted in a statement issued on Monday that the senior management and investment team, who are ultimately in charge of the investment decisions, took collective responsibilities and saw a decrease in their income.

The sovereign wealth fund also expressed its dissatisfaction with the investment results and the negative impact they had on its reputation.

The precise percentage or sum by which pay were lowered was not made public by Temasek.

FTX received a $210 million first investment from the fund, followed by $65 million in two subsequent capital rounds between October 2021 and January 2022.

Before making the investments the previous year, the state-owned fund claimed to have thoroughly examined the bitcoin exchange over an eight-month period.

This assessment included a careful examination of the exchange’s audited financial documents, which showed that it was profitable at the time.

Temasek had a market capitalization of more than S$403 billion ($298.1 billion; £241.3 billion) as of March 2022, therefore the money invested in the cryptocurrency platform was a very tiny fraction of the company’s overall holdings.

Nevertheless, Temasek’s losses in FTX were acknowledged to have harmed the fund’s reputation by Singapore’s deputy prime minister, Lawrence Wong, in December.

He stressed further that the participation of other well-known international institutional investors, such BlackRock and Sequoia Capital, did not lessen the severity of the losses.

A nation’s savings account, sovereign wealth funds often participate in a variety of investing activities, including the purchase of stocks, foreign currencies, real estate, and other assets.

In November, FTX, which was valued at $32 billion a year earlier, filed for bankruptcy. According to reports, there were almost $8 billion in unreported client cash.

Sam Bankman-Fried was a well-known person in the cryptocurrency sector who co-founded FTX in 2019.

He was well-known for his political connections, celebrity endorsements, and ability to save financially precarious businesses.

Mr. Bankman-Fried has been charged by federal authorities in the United States of stealing billions of dollars from FTX users to pay off debts at his other business, Alameda Research, and for making other investments.

In December, prosecutors unveiled eight criminal charges against Mr. Bankman-Fried, which included wire fraud, money laundering, and violations related to campaign finance.

An additional five charges were filed against him in March, and financial regulators have also lodged claims against him.

Gary Wang, a co-founder of FTX, and Caroline Ellison, the former head of Alameda, have also been charged for their alleged involvement in the collapse of the company.

Mr. Bankman-Fried was apprehended in December in the Bahamas, where he resided and where FTX was headquartered.

In an interview conducted just days prior to his arrest, he stated, “I did not knowingly commit fraud. I do not believe I committed fraud. I did not want any of this to occur. I was certainly not as capable as I believed myself to be.”

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