Temasek Shuns Crypto Investment Amid Regulatory Uncertainties14. July 2023
• Temasek, a Singapore sovereign wealth fund, is reportedly not interested in investing in the digital assets industry due to regulatory uncertainties.
• The firm previously invested $275 million in FTX but wrote off the entire stake following its bankruptcy.
• Temasek is also avoiding crypto companies and cryptocurrencies right now due to regulatory issues.
Temasek Steers Clear of Crypto Investment
Temasek, a sovereign wealth fund owned by the Singapore government, is reportedly avoiding crypto companies as the nascent industry faces regulatory uncertainties. With a net portfolio worth $496 billion, the investment firm had previously put $275 million into FTX before writing off the entire stake following its bankruptcy.
Temasek chief investment officer Rohit Sipahimalani cites “a lot of regulatory uncertainty” in this environment as one reason why it would be difficult for them to make another crypto exchange investment at this time. He adds that with Ripple, Coinbase and Binance all facing charges from the U.S. Securities and Exchange Commission (SEC), Temasek finds investing in crypto exchanges unappealing right now.
No Interest In Cryptocurrencies
Sipahimalani clarifies that they have never been looking to invest in cryptocurrencies either: “Even the investment in FTX we were talking about investing in an exchange which allowed us to get fee-based revenue without thinking [of] balance sheet risk or any trading risks.” He indicates that they would only reconsider if there was a suitable regulatory framework and investment opportunity within it.
Temasek had previously invested $275 million into FTX before suffering losses when the exchange went bankrupt earlier this year. This led them to write off their entire stake as they decided against further investments within this uncertain industry climate where even established players such as Ripple are being charged by regulators over alleged violations of securities law regulations.
Crypto Industry Challenges
The challenge for those operating within the cryptocurrency space is finding ways of navigating through these complexities while still making profits from their business models – something that has been difficult for many firms despite their best efforts thus far given current market conditions and increased scrutiny from governments around the world.