Temasek still rules out direct crypto investments after FTX loss

The Singaporean sovereign wealth fund Temasek still does not see crypto as a direct investment. After a significant loss on the now-collapsed exchange FTX, the door for direct crypto investments remains firmly shut, CNBC reports.

$275 million loss leaves deep scars

In 2022, Temasek acknowledged a write-down of approximately $275 million on its investment in FTX. That amount continues to leave clear traces four years later. Chief Investment Officer Nagi Hamiyeh stated during a conversation with CNBC that the fund currently has no direct crypto investments and does not plan to make any in the foreseeable future.

Hamiyeh indicated that regulatory uncertainty plays a major role in that decision. “I cannot predict what will happen in the future, and what role crypto will play in the real economy, depending on the various regulations that may come,” he said. Crypto therefore remains officially outside the fund’s investment scope. Globally, regulators are still struggling with clear frameworks for the sector, as also shown by initiatives such as the SEC safe harbor rules and the ESMA crypto custody review.

Blockchain infrastructure remains of interest

Despite the dismissive attitude towards direct crypto investments, Temasek does not completely rule out the broader technology. The fund says it will continue to monitor developments around blockchain and related infrastructure applications in the real economy. That distinction, between the underlying technology and crypto as an investment product, is a common middle ground for large institutional parties.

Temasek manages one of the largest sovereign investment portfolios in the world and has learned a painful lesson from the FTX debacle about the risks of direct exposure to crypto markets. As long as no clearer regulatory framework exists, a reconsideration seems unlikely. The uncertainty that Hamiyeh cites also plays out elsewhere: for instance, India’s central bank wants to completely ban crypto, illustrating how divided governments worldwide still are on the approach to digital assets.