Temasek Intends To Write Down Investments In FTX Of Up To $300M: Expert Weighs In On What's Next In Crypto Investments

The state investment fund of Singapore, Temasek, is prepared to write down investments to the tune of $200 million to $300 million in the bankrupt cryptocurrency exchange FTX.

In concurrent investment rounds of $400 million each, Temasek invested in the FTX mothership and its U.S. subsidiary FTX US, in January this year.

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The fund is now preparing to write off all of its investments in the Sam Bankman-Fried-led crypto exchange, which witnessed a mind-numbing collapse last week, Bloomberg reported, quoting an unnamed source.

The fund has been one of the most well-known investors in the cryptocurrency sector.

Earlier this year, it made investments in the non-fungible token (NFT) investment company Animoca Brands and liquidity provider and market maker Amber Group.

The extent of Temasek’s appetite for the digital currencies sector — particularly after having to write off the $200 million to $300 million as a result of FTX's abrupt collapse — is yet to be ascertained.

Temasek managed $294 billion in assets at the end of March, according to the report.

In less than a week, FTX went from being the third-largest cryptocurrency exchange in the world to declaring bankruptcy after inconsistencies in the financial sheet of its sister firm Alameda Research were discovered.

FTX, Alameda Research, FTX US, the company’s subsidiary in the Bahamas along with 130 other associated companies subsequently declared bankruptcy last Friday.

More Capitulation Ahead: Expert Weighs In

Speaking with Benzinga, KoinBasket founder and CEO Khaleelulla Baig said that as more skeletons fall out of FTX’s cupboard, the market will witness more capitulation in the coming weeks with a few big names either collapsing or coming under surveillance.

“Retail investors should cultivate the habit of pulling back un-invested cash from exchanges regardless of their financial soundness and regulatory status. High-risk investors with long-term surplus funds may look at allocating lower single-digit percentage allocation to blue chip crypto assets and spread the allocation over four to six tranches,” Baig said.

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Photo: Fernando Cortes via Shutterstock