Singapore investment giant Temasek suspends cryptocurrency operations, citing regulatory uncertainty

Chief Executive Sipahimalani said the entity may change its stance if the regulator implements “the right regulatory framework”.

Rohit Sipahimalani, chief executive of Singapore’s state-owned conglomerate Temasek, said the entity is currently not interested in investing in cryptocurrencies due to regulatory uncertainty.

The company has had a bad run in the digital asset space, losing $275 million when FTX collapsed.

Re-entry possible under appropriate rules

CEO Sipahimalani claimed in a recent interview that there is “a lot of regulatory uncertainty” in the cryptocurrency space, making it “very difficult” for Temasek to join the ecosystem with another investment.

On the other hand, he assured that the company would reconsider its position if regulators imposed a comprehensive regulatory framework for the industry:

“If you have the right regulatory framework, and we’re comfortable with that, and you have the right investment opportunity, then there’s no reason we shouldn’t look at it.”

Rohit Sipahimalani, via The Org

It is worth mentioning that the Monetary Authority of Singapore has taken several steps to ensure maximum protection for local cryptocurrency players. The regulator plans to ban digital asset organizations from lending and staking services to retail investors, and it may insist that the firms hold clients’ assets in designated trusts by the end of 2023.

Temasek is one of many entities that has lost significant amounts of money due to its interactions with once-famous cryptocurrency exchange FTX. The firm, which manages nearly $500 billion in assets, invested $275 million in FTX, which was wiped out when FTX collapsed last November.

Sipahimalani explained that the FTX investment was part of Temasek’s early strategy to allocate funds to “new disruptive technologies to see what’s coming”.

The CEO also revealed that the company performed proper due diligence when considering the move, and proceeded because the market “has good technology, is gaining market share, and has demonstrated cooperation with regulators and licensing wishes”.

Take responsibility

FTX’s unsuccessful interactions have damaged the reputation of the Singaporean state-owned conglomerate. Therefore, the team and senior management who approved the investment have taken full responsibility and reduced their annual salary:

“The investment team and senior management, ultimately responsible for investment decisions, took collective responsibility and their compensation was reduced.”

Temasek did not disclose the exact amount of the deduction, nor did it say whether other employees had received a reduction in their bonuses or wages.

The list of companies that have suffered losses due to investing in FTX also includes BlackRock, the world’s largest asset management company, Sequoia Capital, a venture capital company, Paradigm, an encryption technology investment company, SoftBank of Japan, and more.