Lawrence Wong, Singapore's Deputy Prime Minister and Minister of Finance, described Temasek's $275 million investment loss resulting from the collapse of cryptocurrency exchange FTX as "disappointing" and damaging to Singapore.
Wednesday in Parliament, Wong stated that the losses sustained by Singapore's sovereign wealth fund were "being taken seriously."
He stated that investment losses do not indicate that the governance mechanism is ineffective. It is rather inherent to investment and risk-taking.
Temasek declared in mid-November that it will write down its investment in FTX to zero, "regardless of the result of FTX's bankruptcy protection case." Temasek also stated that it has no direct exposure to cryptocurrencies at this time.
According to a bankruptcy filing, FTX has more than one hundred thousand creditors and liabilities between ten and fifty billion dollars.
He stated that the government does not dictate allocation standards for certain assets or asset classes, including cryptocurrency and other assets.
Ultimately, he added, the government holds boards and management teams accountable for developing investment plans consistent with the government's overall risk tolerance.
He noted that despite the write-off of the FTX investment, Temasek's early-stage portfolio achieved an internal rate of return in the mid-teens over the past decade, outperforming the industry.
The FTX loss will also have no effect on the net investment returns of Singapore's reserves, which are "linked to the predicted long-term returns of our investment companies as a whole and not to individual assets."
The minister stated that the Monetary Authority of Singapore, the country's financial regulator and central bank, intends to adopt some basic investor protection safeguards for licensed digital payment token service providers.
After gathering comments from the industry and the public, MAS will finalize the suggestions and apply the necessary regulatory actions.
However, he stressed that despite these precautions, the monetary authority will be unable to avoid the failure of crypto service providers.
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