Singapore state investor Temasek Holdings announced on Thursday it would write down the value of its entire investment of $275 million in collapsed crypto currency exchange FTX.

“In view of FTX’s financial position, we have decided to write down our full investment in FTX, irrespective of the outcome of FTX’s bankruptcy protection filing,” Temasek said in a statement.

“There are inherent risks whenever we invest, divest, or hold our assets, and wherever we operate. While this write down of our investment in FTX will not have significant impact on our overall performance, we treat any investment losses seriously and there will be learnings for us from this,” the state investor added. “We will continue to remain prudent and exercise caution even as we explore opportunities that are aligned with our structural trends, to deliver sustainable returns over the long term for our overall portfolio.”

According to the statement, Temasek has invested $210 million for a minority stake of about 1 percent in FTX International, and invested $65 million for a minority stake of approximately 1.5 percent in FTX US, across two funding rounds from October 2021 to January 2022.

“The cost of our investment in FTX was 0.09 percent of our net portfolio value of S$403 billion as of March 31, 2022,” it added.

“There have been misperceptions that our investment in FTX is an investment into cryptocurrencies. To clarify, we currently have no direct exposure in cryptocurrencies,” Temasek further clarified in the statement.

Reuters reported on Thursday that FTX’s other backers such as SoftBank Group Corp’s Vision Fund and Sequoia Capital have also marked down their investment to zero after FTX, founded by Sam Bankman-Fried, filed for bankruptcy protection in the United States last week in the highest-profile crypto blowup to date.

In the statement on Thursday, Temasek also explained it had conducted an extensive due diligence process on FTX.

“Similar to all investments, we conducted an extensive due diligence process on FTX, which took approximately eight months from February to October 2021. During this time, we reviewed FTX’s audited financial statement, which showed it to be profitable,” Temasek said. “In addition, our due diligence efforts focused on the associated regulatory risk with crypto financial market service providers, particularly licensing and regulatory compliance (i.e. financial regulations, licensing, anti-money laundering (AML)/ Know Your Customer (KYC), sanctions) and cybersecurity. Advice from external legal and cybersecurity specialists in key jurisdictions was sought, with legal and regulatory review done for the investments.”

Separately, Temasek said it also gathered qualitative feedback on the company and management team based on interviews with people familiar with the company, including employees, industry participants, and other investors. Post investment, it said it continued to engage management on business strategy and monitor performance.

Reports have since surfaced that customer assets were mishandled and misused in FTX, Temasek said. If these statements are true, then this amounts to serious misconduct or fraud at FTX. All of this is currently being investigated by the regulators, Temasek noted.

“It is apparent from this investment that perhaps our belief in the actions, judgment and leadership of Sam Bankman-Fried, formed from our interactions with him and views expressed in our discussions with others, would appear to have been misplaced,” it added.

“We expect companies that we invest in to comply with their obligations under the laws and regulations of jurisdictions in which they have investments or operations; abide by sound corporate governance; and above all act ethically always. As we only had a about 1 percent stake in FTX, we did not have a board seat. However, we take corporate governance seriously, engage the boards and management of our investee companies regularly and hold them accountable for the activities of their companies,” the state investor said.

Temasek said its early stage investments made up about 6 percent of its total portfolio.

It said the thesis for its funding of FTX was to invest in a leading digital asset exchange that would provide it with “protocol agnostic and market neutral exposure” to crypto markets with a fee income model and no trading or balance sheet risk.

Singapore’s Temasek warns of cautious outlook, expects to slow down investment