Another Crypto Firm, With Investments from Temasek, Goes Bankrupt

By
Chew Ming Hui
-

Another crypto firm has gone bankrupt.

And Temasek, Singapore’s global investment company, was invested in it.

Here’s what happened.

FTX to start US bankruptcy proceedings

The crypto exchange FTX is to start US bankruptcy proceedings following a liquidity crisis at the cryptocurrency group.

FTX’s chief executive Sam Bankman-Fried is to step down as well.

For the crypto bros among us, you would have already known that the crypto trading platform has been struggling for a while.

FTX had been scrambling to raise funds to stave off collapse following a wave of withdrawals.

The amount of funds? Up to US$9.4 billion (S$12.92 billion) from investors and rivals.

On Friday, FTX shared on Twitter that the company and its affiliated crypto trading fund Alameda Research and around 130 other companies have commenced voluntary bankruptcy proceedings, otherwise known as Chapter 11 proceedings, in Delaware.

Yes, this tweet comes from the real FTX Twitter account – not some other Twitter user who paid for the blue verification check.

In a series of tweets from Mr Bankman-Fried, he said the bankruptcy filing “doesn’t necessarily have to mean the end for the companies”. The chief executive added that he was optimistic that the FTX Group’s new CEO can do what was best for the companies.

US$205 million invested in FTX

Singapore’s global investment company, Temasek, was invested in FTX as well.

Temasek was estimated to have invested US$205 million in FTX.

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At its peak in January 2022, the investment even hit a value of US$320 million.

Perhaps Temasek did burn their fingers here, but you don’t have to.

Watch this video to find out the new rules to be imposed on Cryptocurrency in Singapore, and why it should matter to you:

FTX Under Investigation By Regulators

Some investors like Sequoia and Softbank, had already marked down their FTX investments to zero earlier.

As FTX’s situation seem to get worse however, regulators started to intervene.

FTX is currently under investigation by the United States’ Securities and Exchange Commission, Justice Department as well as the Commodity Futures Trading Commission.

I don’t think this is what people meant by “I don’t chase, I attract”…

On Wed (9 Nov), FTX was also asked by Cyprus’ Securities and Exchange Commission to suspend its operations.

That’s not all.

Even the Bahamas froze FTX.com’s assets.

The downfall of Mr Bankman-Fried’s crypto empire means that the assets owned by the 30-year-old FTX founder have now become worthless.

At his peak, he was worth US$26 billion. Even at the start of just this week, he was still worth US$16 billion.

At one point, the mogul was doing so well he was likened even to Mr John Pierpoint Morgan.

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Featured Image: marketwatch.com & enepl.com.sg

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Chew Ming Hui
Email: [email protected]