Temasek’s write-down amounted to just 0.09 per cent of its S$403 billion portfolio as of March 31, but its status as a state-owned entity that contributes to Singapore’s annual revenue invited criticism of the investment, with some commentators questioning the extent of due diligence that was conducted.

Wong, who is also finance minister, said in parliament on Wednesday that Temasek’s losses, as with any loss by the country’s investment entities, was disappointing.

“The fact that other leading global institutional investors like BlackRock and Sequoia Capital also invested in FTX does not mitigate this,” he said.

“Even more so because the loss arose from what turned out to be a very badly managed company, and from possible fraud and mishandling of customer funds,” Wong said, responding to a slew of questions on the losses from government and opposition MPs. “What happened with FTX, therefore, has not only caused financial loss to Temasek, but also reputational damage.”

Temasek – which is fully owned by the Minister for Finance but operates independently – has since launched an internal review by an independent team of its investment to improve its processes and draw lessons for the future, Wong said.

Similar reviews have been conducted in the past and the government “will not rule out” taking the review a step further through means such as calling in external auditors, he said.

Asked by opposition leader Pritam Singh on the thresholds that had to be met before the country’s auditor-general would be directed to step in, Wong said it would require a “significant threshold” involving not just investment losses but indications of negligence and misconduct.

The prime minister-in-waiting noted that Temasek’s performance in early-stage investments had generated an internal rate of return that was in the “mid-teens” over the last decade, which was “better than industry averages”.

Wong said the losses from FTX would not affect the investor’s contribution to the net investments returns contribution (NIRC) – the amount of Singapore government revenue that comes from interest earned on its reserves.

The NIRC is computed based on long-term expected returns from net assets invested by the central bank, sovereign wealth fund GIC and Temasek, as well as investment income.

‘No speculation’: FTX meltdown puts focus on Singapore’s digital asset stance

Alongside questions about FTX and Temasek, Wong was also asked about the government’s broader outlook on the embattled crypto sector.

Wong emphasised that Singapore had no aspirations to “hub crypto activities here” and seeks to be a “responsible and innovative digital asset player”.

“Some of the earlier optimism about blockchain technologies has been proven to be ... not well-placed. I think there’s a more realistic sense of what these technologies can do,” he said.

Still, there will likely be “specific use cases” where blockchain technologies can be applied and the central bank was exploring pilot projects for the financial sector, Wong said.

The minister reiterated a recent warning by the central bank about the severe risk faced by retail investors who trade in cryptocurrencies.

Noting that FTX was not the first crypto platform to collapse and was unlikely to be the last, Wong said: “Those who trade in cryptocurrencies must be prepared to lose all their value. No amount of regulation can remove this risk.”

Temasek’s FTX loss an ‘egg on face’ but it’s unfazed: Singapore’s Ho Ching

Others have also chimed in on the matter in recent days amid intense social media discussions. Ho Ching, Temasek’s long-time former chief executive, in a Facebook post described the firm’s decision to write down its full investment in FTX as necessary to move forward “without being blinkered by wishful thinking”.

“Let’s keep calm, as we continue to tend to the fields and fry other fishes,” she said.

Temasek invested US$210 million for a stake of about 1 per cent in FTX International and a further US$65 million for a stake of about 1.5 per cent in FTX US, across two funding rounds from October 2021 to January 2022. Neither Temasek nor GIC – seen as the more conservative investor among the two entities – have holdings of cryptocurrencies.