Rohit Sipahimalani, chief funding officer of Temasek Holdings Pte, speaks throughout a information convention in Singapore, on Tuesday, July 11, 2023.
Ore Huiying | Bloomberg | Getty Pictures
Singapore’s sovereign wealth fund Temasek will not be presently seeking to spend money on crypto corporations amid regulatory uncertainty within the sector, its chief funding officer Rohit Sipahimalani mentioned.
“There’s a number of regulatory uncertainty on this setting. And I do suppose that be very troublesome for us to make one other funding and trade in the course of all this regulatory uncertainty,” Sipahimalani advised CNBC in a Tuesday interview.
The U.S. Securities and Alternate Fee charged prime U.S. crypto trade Ripple for breaching native securities legal guidelines by promoting its native token XRP with out first registering it with the regulator.
The SEC individually charged one other U.S. crypto trade Coinbase for working as an unregistered securities trade, a dealer or a clearing agency. It additionally accused Coinbase of failing to register the provide and sale of its staking program — which permits prospects to earn rewards for holding sure cryptocurrencies.
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“If in case you have the fitting regulatory framework, and we’re snug with it, and you’ve got the fitting funding alternative, there is no motive for us to not to take a look at it,” Sipahimalani mentioned.
“However as I mentioned, at this time limit, we’d not be snug investing in exchanges given the best way issues are proper now.”
He added that Temasek by no means meant to spend money on cryptocurrency.
“We have by no means been seeking to spend money on cryptocurrencies. Even the funding in FTX, we’ll be speaking about investing in an trade, which allowed us to get fee-based income with out pondering [of] stability sheet threat or any buying and selling dangers,” mentioned Sipahimalani.
On Tuesday, Temasek posted its worst returns since 2016, weighed by macroeconomic and geopolitical challenges.
FTX loss
“Firstly, you bought to keep in mind that the FTX funding was part of our early-stage funding technique, the place we spend money on new disruptive applied sciences to see what’s across the nook, in order that we are able to deliver that to our portfolio corporations and profit inside our ecosystem,” mentioned Sipahimalani.
“Secondly, we’re wanting, clearly, for returns to those early-stage corporations, however most likely most significantly, we’re seeking to discover the following winners that we are able to double down on, as they get away. And lots of of them change into in the end a core a part of our portfolio.”
He referred to corporations like Alibaba and Meituan as such corporations.
“We acknowledge investments at that stage is binary and dangerous, and due to this fact we depend on diversification. We cap early-stage investments at 6% of our portfolio,” he added.
Temasek did the required due diligence for an early-stage funding when contemplating FTX, Sipahimalani mentioned, and in the end went forward as a result of FTX “had good expertise was gaining market share, and confirmed a willingness to interact with regulators and be licensed.”
However in the end, it’s “very troublesome to at all times uncover that due diligence,” mentioned Sipahimalani.
“After we do early stage investing, that there will probably be some losses, some write-offs, however, importantly for us, the entire portfolio of early stage investments ought to do effectively.”