Media personality Kevin O’Leary testified on Wednesday that the collapse of cryptocurrency firm FTX has an “upside”, that the industry is “eliminating its herd”.
FTX spokesman Kevin O’Leary testified before the Senate Banking Committee on Wednesday discussing the collapse of the cryptocurrency trading platform, and recalled a conversation he had with former CEO and co-founder Sam Bankman- Fried right after things went wrong.
O’Leary recalled that after his company’s assets lost value, he had difficulty getting answers, so he called Bankman-Fried himself.
“After my accounts lost all of their assets and all of their accounting and business information, I couldn’t get answers from any of the company’s executives, so I just called Sam Bankman-Fried and said, ‘Where’s the money, Sam?'” O’Leary told the committee in response to a question about why he believes the company failed.
He said Bankman-Fried’s response began with him claiming he didn’t know because he no longer had access to the company’s servers.
WHERE DID THE MONEY GO IN THE FTX CRYPTO COLLAPSE?
Archive video from 2022 shows the squalid condition of Nassau, the Bahamian correctional facility known as Fox Hill Prison. (Nassau Guardian via Reuters)
“I said ok let’s back off. This is a simple case in my mind where did the money go?” O’Leary continued. “And I said, ‘Sam, go back 24 months. Tell me the income from the use of your company’s assets. Where did you spend it?'”
O’Leary then relayed Bankman-Fried’s response, which was that during the previous 24 months, he had paid between $2 billion and $3 billion to competitor Binance to buy back the FTX shares that Binance or its CEO Changpeng ” CZ” Zhao had acquired. O’Leary explained that, according to Bankman-Fried, Binance refused to comply with requests from different jurisdictions to obtain the license, so he ended up buying back the shares at a premium.
DEMS QUIET ABOUT FTX FOUNDER RETURNING MILLIONS IN DONATIONS
Sam Bankman-Fried, Founder and CEO of FTX Cryptocurrency Derivatives Exchange, during an interview on an episode of Bloomberg Wealth with David Rubenstein in New York, US, on Wednesday, Aug. 17, 2022. (Jeenah Moon/Bloomberg via Get (Jeenah Moon/Bloomberg via Getty Images/Getty Images)
O’Leary then responded directly to the initial question posed to him about what happened to FTX.
“From my point of view, my personal opinion, these two giants that own the unregulated market together and build these incredible businesses in terms of growth were at war with each other and one put the other out of business intentionally. Now maybe there’s nothing wrong with that. Maybe there’s nothing wrong with love and war, but Binance is a massive, unregulated global monopoly right now,” he said.
“Now, many other reasons I’m sure, but that’s my personal opinion,” he added.
Former US Attorney General Matthew Whitaker discusses the indictment and charges of FTX’s Sam Bankman-Fried and what it means for investors.
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FTX declared bankruptcy on November 11. Bankman-Fried has since been indicted by the SEC, CFTC and federal prosecutors in the Southern District of New York on allegations of conspiracy and fraud. Among the allegations were allegations that Bankman-Fried took funds from investors, transferred them to his crypto hedge fund Alameda Research and used them for personal purposes, including political contributions.
Bankman-Fried was arrested in the Bahamas the night before he was scheduled to testify before a House committee.