The collapse of the now-bankrupt cryptocurrency change FTX has put the Singapore prime minister and the ruling authorities in a scorching seat. Prime Minister Lee Hsien Loong and Deputy Prime Minister Lawrence Wong are set to face grilling questions for his or her failure to guard retail traders.
The Members of Parliament (MP) from the opposition Staff’ social gathering raised 15 questions on Temasek’s funding and FTX collapse. The MPs questioned the federal government’s credibility in monitoring the extent of investments by Temasek and Singapore’s sovereign wealth fund GIC.
The discussions across the authorities insurance policies whereas investing in digital property shall be scrutinized additional in a parliamentary dialogue on Nov. 28, reported a Singaporean each day. The opposition MPs have really helpful a bipartisan committee to query Temasek on its funding methods and danger administration approaches.
Singaporean state-backed investor Temasek was one in every of 69 traders to spend money on the FTX crypto exchange’s $420 million funding round in October 2021. The agency had invested $210 million within the international change for a minority stake of 1% and one other $65 million in its sister firm FTX.US. Nevertheless, the state-backed investor wrote down its whole $275 million funding within the crypto change “regardless of the end result of FTX’s chapter safety submitting.”
Temasek additionally revealed that regardless of eight months of due diligence in 2021, it didn’t find any significant red flags in FTXs financials earlier than deciding to take a position $275 million into the now-failed cryptocurrency change. Aside from Temasek, Sequoia Capital additionally marked down its entire $214 million investment within the crypto change.
The influence of the FTX collapse has been far-reaching and the worst hit has been hundreds of thousands of retail traders whose funds had been misappropriated and utilized by the crypto change to mitigate its personal danger. The collapse has additionally led to wider regulatory dialogue and demand for better regulatory oversight of those centralized entities.