I just talked to Kevin O’Leary and Anthony Scaramucci about FTX
Here’s what they said 🧵
Here’s what they said 🧵
I started by asking if they still feel bullish on crypto.
Both said yes.
Kevin O'Leary got involved in crypto once Canadian regulators warmed to the idea after approving an ETF for Bitcoin and Ethereum.
He said that was a turning point in the adoption of crypto.
Both said yes.
Kevin O'Leary got involved in crypto once Canadian regulators warmed to the idea after approving an ETF for Bitcoin and Ethereum.
He said that was a turning point in the adoption of crypto.
Kevin also says that crypto is here to stay, but now the spotlight is on regulators.
As a fiduciary, he is obligated to allocate his clients’ assets safely and responsibly across asset classes.
He can only invest in crypto assets that have the support of regulators.
As a fiduciary, he is obligated to allocate his clients’ assets safely and responsibly across asset classes.
He can only invest in crypto assets that have the support of regulators.
That’s why only his personal money was in FTX: Kevin didn't put any LP money into FTX or FTX US.
But he vows to find where the money went. He has an army of lawyers on it. It could take years, but we’ll eventually know exactly what happened.
But he vows to find where the money went. He has an army of lawyers on it. It could take years, but we’ll eventually know exactly what happened.
My favorite quote from the conversation: Kevin said, "I'm one pissed off cowboy with a lot of lawyers."
Anthony said that his firm, Skybridge Capital, had no assets in custody at FTX.
But he sold 30% of his company to FTX for $45m cash.
Sam asked Anthony to buy $10m in FTT token, and Anthony agreed.
But he sold 30% of his company to FTX for $45m cash.
Sam asked Anthony to buy $10m in FTT token, and Anthony agreed.
Anthony met with Sam and Sam's dad on Nov 8. Knew there was a very serious problem.
“It was very obvious that they had moved money between FTX and Alameda.”
Compliance people told him money was being moved, which violated terms of service.
“It was very obvious that they had moved money between FTX and Alameda.”
Compliance people told him money was being moved, which violated terms of service.
Anthony held onto his $10m FTT, decided not to sell since he essentially had inside information on the situation.
I asked both how so many firms missed the red flags of FTX.
And also how people like Chamath noticed some of them, like FTX lacking a board.
And also how people like Chamath noticed some of them, like FTX lacking a board.
Both took serious issue with people claiming to know that FTX was going to collapse.
Kevin says that many of the red flags were only obvious after the fact, and people like Chamath are “revising history” to make themselves look better.
Kevin says that many of the red flags were only obvious after the fact, and people like Chamath are “revising history” to make themselves look better.
Anthony also said that those red flags weren’t obvious at the time.
True, FTX lacked a board of directors, but they had a board of advisors with Dan Loeb and other reputable people.
True, FTX lacked a board of directors, but they had a board of advisors with Dan Loeb and other reputable people.
Anthony also said that a conflict of interest is not a red flag.
They exist everywhere on Wall Street, at every single firm.
They need to be disclosed and explained to investors, but they always exist.
They exist everywhere on Wall Street, at every single firm.
They need to be disclosed and explained to investors, but they always exist.
Kevin said “now we look like idiots”, but at the time they made the best decisions they could with the given information.
FTX US looked like the best place for institutions to put their money in this nascent industry.
FTX US looked like the best place for institutions to put their money in this nascent industry.
Anthony added that they are aggressive investors, and they will keep taking swings.
They’ll have some huge misses, but that’s how they end up with a couple of huge wins as well.
They’ll have some huge misses, but that’s how they end up with a couple of huge wins as well.
Kevin also emphasized that no one truly knows what happened yet.
He didn’t want to bash Sam too hard and said that he would invest in Sam again if it turns out that he didn’t commit a crime.
But he says we can’t be sure until the lawyers and forensic accountants do their work.
He didn’t want to bash Sam too hard and said that he would invest in Sam again if it turns out that he didn’t commit a crime.
But he says we can’t be sure until the lawyers and forensic accountants do their work.
I asked if Wall St is basically going to end up owning the space as large institutions like Fidelity get into retail crypto investing.
Kevin says crypto will become an asset class just like any other.
He says that institutions will continue to take on exposure to crypto.
Kevin says crypto will become an asset class just like any other.
He says that institutions will continue to take on exposure to crypto.
Thanks for reading!
Subscribe for more 👇 gritcapital.substack.com
Subscribe for more 👇 gritcapital.substack.com
First 35 mins watch here 👇
youtube.com
youtube.com
Loading suggestions...