It’s no secret that the collapse of Sam Bankman-Fried’s digital currency exchange FTX was devastating. However, it’s not just a past event; its consequences are still reverberating, causing institutional investors like Singapore’s sovereign wealth fund Temasek to shun the digital currency industry.

In a recent interview with CNBC, Temasek Chief Investment Officer Rohit Sipahimalani said that ongoing regulatory uncertainty and a whopping $275 million loss in FTX made it “very difficult” for the $382 billion investment fund to make another investment in the space.

Clarifying that Temasek never had any interest in buying digital currencies directly, Sipahimalani said that its investment in FTX has been made after proper due diligence and in alignment with its strategy of having roughly 6% of its portfolio in early-stage investments.

As a result of the debacle, those responsible for investing had their salaries cut as Singapore’s Deputy Prime Minister lamented it as “very disappointing” and harmful to the country’s reputation.

The FTX collapse even professional investors didn’t see coming

Temasek isn’t the only entity with egg on its face due to Sam Bankman-Frieds penchant for fraud. Institutional investors like Sequoia Capital and Paradigm were also caught in the crosshairs alongside globally renowned businessmen like Kevin O’Leary and Mark Cuban.

FTX was launched in May 2019 and became one of the industry’s leading exchanges and trading platforms within just a few years. While investors of all stripes gushed praise on FTX CEO Sam Bankman-Fried and showered him with investment checks, behind the scenes, Bankman-Fried was allegedly engaged in mass-scale fraud, eventually leading to the collapse of both FTX and its sister firm Alameda Research in November 2022.

Since then, a long list of charges, including wire fraud, securities fraud, and money laundering, have been laid on Bankman-Fried. In early 2023, he was released on a $250 million bail bond, raising questions about how an alleged criminal has access to such vast sums to secure his release.

As the Temasek story shows, Bankman-Frieds’ deception evaded the scrutiny of even institutional investors, leading to a catastrophic meltdown in the digital currency markets, countless billions in losses, and a ‘crypto winter’ the industry may never recover from.

A cautionary tale—unregulated, unsafe, and unpredictable

While digital currency proponents like to paint them as the next big thing, the reality is there is little value in any of the thousands of companies, organizations, and blockchains in the space. Yet, there’s more than just a delusion-driven bubble at play here—there is a crime, and there are still very few rules to stop it.

The FTX collapse showed that a supposedly revolutionary industry is little more than a fundamentally unsound house of cards. Even exchanges like FTX, which seemed a reasonable bet for many investors since they have actual revenue-generating business models, are unstable and unsafe due to the behavior of their owners and executives who can not resist insider trading, counter trading customers, and taking outsized risks with the billions following through their digital fiefdoms.