(National Review) Kevin O’Leary, an investor and judge on Shark Tank who was paid $15 million to act as a spokesman for FTX, testified before the Senate Banking Committee on Wednesday about the crypto exchange’s collapse.
O’Leary has said as an investor he lost all of the money he was paid to act as a spokesman for the exchange, which fell apart in November, costing investors millions in losses.
FTX founder Sam Bankman-Fried was recently arrested on charges that he misled investors and mishandled billions in funds. He has been accused of misusing customer funds deposited with FTX to boost his crypto hedge fund, Alameda Research.
O’Leary was among a group of celebrities, including Tom Brady and Larry David, who were sued by FTX investors for their promotion of the firm. He said he put roughly $9.7 million into crypto from the $15 million deal. The rest went to taxes and agent fees, he said.
Senator Pat Toomey (R., Pa.) asked O’Leary on Wednesday why he believes FTX failed.
Investor Kevin O’Leary says Binance put FTX “out of business intentionally” in a Senate Banking Committee hearing on the cryptocurrency exchange’s collapse.
“Binance is a massive unregulated global monopoly now. They put FTX out of business.” https://t.co/jnMj7iC2Yp pic.twitter.com/yemJPmFXWa
— ABC News Politics (@ABCPolitics) December 14, 2022
O’Leary recounted reaching out to Bankman-Fried after the investor discovered his accounts were stripped of all of their assets and accounting and trade information.
“I couldn’t get answers from any of the executives in the firm so I simply called Sam Bankman-Fried and said, ‘Where is the money, Sam?’” O’Leary testified.
He said he then discovered that Bankman-Fried had spent between $2 billion and $3 billion to repurchase shares from Binance CEO Changpeng Zhao, who held 20 percent ownership in Bankman-Fried’s firm.
O’Leary said he asked Bankman-Fried what would compel him to do that. The founder replied that Zhao would not comply with regulators’ requests for data that would allow the firm to get licensed. The founder allegedly told O’Leary “the only option” FTX had was to buy Zhao out at an “extraordinary valuation” of close to $32 billion.
