Kevin O'Leary Talks About How He Nearly Got $8 Billion to Save FTX Before It Failed
Kevin O'Leary, better known as Mr. Wonderful on Shark Tank, has revealed how he and Sam Bankman-Fried (SBF) came close to raising $8 billion from institutional investors to save the crypto exchange FTX before it went under.
All interested investors, however, disappeared after news broke that FTX was under investigation by a number of agencies, including the Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ).
To save FTX, Kevin O'Leary tried to raise money.
In an interview with the Insider that was published on Sunday, Kevin O'Leary discussed his attempts to preserve the cryptocurrency exchange FTX before it shut down. O'Leary owns stock in FTX and works as the company's paid spokesperson.
Mr. Wonderful was speaking with a number of potential investors interested in holding a stake in the cryptocurrency exchange before FTX filed for bankruptcy on November 11. He told the publication that sovereign wealth funds were open to contributing $8 billion to save FTX.
O'Leary mentioned that Bankman-Fried had contacted to discuss the investments.
We spoke for a moment. He was really thoughtful. We talked about a couple of issues with the timing of that $6 billion to $8 billion. However, I had enough knowledge to establish that number was eight by going back to the sources who had expressed an interest.
The regulators will "come down hard" on the situation, Bankman-Fried stated during their phone call, according to Mr. Wonderful.
Rescue offers, however, abruptly dried up as news spread that FTX was under investigation by the Securities and Exchange Commission (SEC), the Department of Justice (DOJ), and other international regulators. O'Leary went on:
Everyone who had expressed interest had left. That was my reply to Sam's text. and I informed him there would be no way to do that.
O'Leary thinks that investors would have felt comfortable keeping their assets in FTX if a sovereign wealth fund or other buyers had invested about $4 billion. In essence, he said, the proposition under discussion was that a $32 billion asset could be acquired for $4 billion.
‘There’ll Be a Mountain of Litigation’
He disclosed that Mr. Wonderful has begun shifting his funds overseas, pointing out that the only nation that provides fully regulated broker-dealer exchange accounts is Canada.
The Shark Tank participant stated, "We have confidence that the regulatory environment in Canada scrutinizes accounts that can't be commingled," adding that he thinks the market has not yet reached the bottom of the FTX fallout.
O'Leary expressed his opinion on how the FTX meltdown has shaken confidence in the cryptocurrency industry:
There are numerous accusations floating about... There is no denying that the situation is challenging. There will be a huge amount of legal action.
O'Leary claims he has never encountered a more brilliant mind when it comes to cryptocurrency and blockchain, despite regulators looking into Bankman-Fried and the crypto industry screaming fraud. He explained:
He is a genius. He's most likely one of the most skilled cryptocurrency traders in the world, so I was pleased.
The Shark Tank star declared last week that he would support Bankman-Fried once more if he had another business idea. Since the majority of users think that the former FTX CEO engaged in numerous fraudulent operations, this has enraged the cryptocurrency sector.
O'Leary is deducting all of his FTX interests, just like other investors, such as Temasek Holdings of Singapore and the Ontario Teachers' Pension Fund. "I'm putting that all down to zero," he said. What can be recovered is unclear.
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