Lawrence Wong, Singapore’s financing minister, speaks throughout the Bloomberg New Economy Forum in Singapore, on Thursday,Nov 17, 2022.
Bryan van der Beek|Bloomberg|Getty Images
Temasek’s financial investment loss of $275 million in the collapse of cryptocurrency exchange FTX was “disappointing” and damaging for Singapore, stated Deputy Prime Minister and Finance Minister Lawrence Wong
Speaking in Parliament on Wednesday, Wong stated that the losses Singapore’s sovereign wealth fund suffered were “being taken seriously.”
But the financial investment losses do not indicate the governance system is not working, he stated. “Rather, it is the nature of investment and risk-taking.”
Temasek revealed in mid-November that it will be making a note of the worth of its financial investment in FTX to absolutely no, “irrespective of the outcome of FTX’s bankruptcy protection filing.” Temasek likewise stated that they presently have no direct exposure in cryptocurrencies.
What occurred with FTX for that reason has not just triggered monetary loss to Temasek, however likewise reputational damage.
Lawrence Wong
Deputy Prime Minister, Singapore
FTX has more than 100,000 financial institutions in addition to liabilities in the variety of $10 billion to $50 billion, according to an insolvency filing.
“What happened with FTX therefore has not only caused financial loss to Temasek, but also reputational damage,” Wong stated.
“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 stated, including that an internal evaluation is being performed to study what failed with the FTX offer and how to enhance the procedure.
He stated the federal government does not recommend standards on the allotment of particular possessions or possession classes, whether for cryptocurrencies or other possessions.
Ultimately, the federal government holds the boards and management groups accountable for creating financial investment techniques in accordance with the federal government’s total danger tolerance, he 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 in the long term,” Wong stated in reaction to Members of Parliament’s concerns.
“In this way, we can continue to add to our national reserves and provide a stable income stream to fund government programs for a long time to come.”
He mentioned that in spite of the crossing out of the FTX financial investment, Temasek’s early-stage portfolio, since March, created an internal rate of return in the mid-teens over the last years– much better than the market average.
The FTX loss will likewise not affect the net financial investment returns of Singapore’s reserves, which are “tied to the overall expected long term returns of our investment entities and not to individual investments.”
The minister stated that moving forward, the Monetary Authority of Singapore– the nation’s monetary regulator and reserve bank– prepares to present some fundamental financier defense procedures for digital payment token company which are certified in Singapore.
After getting market and public feedback, MAS will complete the propositions and carry out proper regulative procedures.
But he warned that even with these procedures, the financial authority will not have the ability to avoid crypto company from stopping working.
“Those who trade cryptocurrencies must be prepared to lose all their value. No amount of regulation can remove this risk,” he alerted.
