Singapore Deputy Prime Minister Lawrence Wong Calls FTX’s Loss ‘Disappointing’, Is His Position in Jeopardy?
The Deputy Prime Minister of the Republic of Singapore since 2019, Lawrence Wong, said on Wednesday that the state’s sovereign wealth fund, Temasek Holdings, has launched an internal review of its investment in FTX, now bankrupt.
Temasek had invested some $275 million in FTX, a loss that is disappointing and damaging for Singapore. We are taking this seriously.”
Furthermore, he added:
“But investment losses don’t mean the governance system isn’t working. Rather, it is the nature of investing and risk taking.”
“Temasek acknowledges this and has issued a comprehensive statement to explain its due diligence process and the circumstances that led to its investment in FTX.”
Lawrence Wong: “It is disappointing when there is a loss”
“What has happened with FTX has not only dealt a financial blow to Temasek. If not, it has also caused reputational damage.
He also said that the spillover effects of the FTX collapse on Singapore’s financial system and economy “will be very limited.”
“It is disappointing when there is a loss, as in the case of Temasek’s investment in FTX. The more so because the loss arose from what turned out to be a very poorly run business and possible fraud and mishandling of client funds.”
They carry out an internal review of their investment in FTX
Singapore’s deputy prime minister calls FTX loss ‘disappointing,’ pledges to improve the process https://t.co/7sFceFDC4S— CNBC (@CNBC) November 30, 2022
So Lawrence Wong, who is also Finance Minister, told the Singapore Parliament that the investigation will be carried out by an “independent team.” And that it intends to “study and improve procedures and draw lessons for the future.”
By the way, the Government does not rule out that an external auditor deals with the matter. But it will be because of “something that we feel has gone wrong within the organization, possibly, there may be negligence, there may be fraud, there may be misconduct.”
In fact, in the future, Singapore plans to introduce some basic investor protection measures for digital payment token service providers that are licensed in Singapore, but “no amount of regulation can eliminate this risk.”
“Once investments are made, the companies that are invested in are closely monitored. But there is never enough diligence to eliminate all risks at once.
Very importantly, according to Wong, the losses from the collapse of the FTX cryptocurrency platform will not impact Temasek’s net remuneration.
«The important thing is that our investment entities take lessons from each failure and success. And continue to take well-calculated risks to achieve good overall returns over the long term.”
He added: “In this way, we can continue to increase our national reserves. And provide a stable revenue stream to finance government programs for a long time.”
In closing, Lawrence Wong said that: “Those who trade cryptocurrencies must be prepared to lose all their value. No amount of regulation can eliminate this risk.”
I say goodbye with this phrase from Jean Paul Marat: “There is no such thing as failure, except when we stop trying.”