Shark Tank Star Kevin O’Leary, aka Mr. Wonderful, informed the US Congress why he believes crypto exchange FTX failed due to competitors Binance intentionally deleting it. He shared his thoughts at a congressional hearing titled, “Crypto Crash: Why the FTX Bubble Burst and the Harm to Consumers,” before the Senate Banking Committee, Housing And Urban Affairs on Wednesday.
Kevin O’Leary Reveals What Former FTX CEO Told Him About Binance
Sen. Pat Toomey (R-PA) asked Mr. Wonderful, “Why do you think FTX failed?” O’Leary replied that he had an opinion and mentioned what the former CEO of FTX, Sam Bankman-Fried (SBF), said to him after the Shark Tank Star noticed that funds from his FTX accounts disappeared. He relayed:
After my accounts were taken from me and all my accounting and business information was deleted. I could not get any answers from the company executives so I simply called. Sam Bankman-Fried and he said, “Where’s the best way to spend your money?”
SBF reportedly told O’Leary that he “didn’t know anymore” as he was “denied access to the servers”. Later, he informed the Senate committee: “This is a simple case in my mind of ‘where did the money go?’”
During their phone conversation, the Shark Tank star asked Bankman-Fried to explain how he utilized earnings derived from FTX assets during the past 24 months. That’s when O’Leary learned about a $2 billion-$3 billion transaction to purchase back Binance shares.
“I didn’t know this at the time, but at some point, CZ [Changpeng Zhao], which runs Binance, bought 20% ownership of the firm from Sam Bankman-Fried for seed shares,” the senators were informed. Mr. Wonderful then asked SBF why he had to buy back CZ shares: “What would you agree to do this? Why not keep your assets in the balance sheet?”
Quoting Bankman-Fried, Mr. Wonderful revealed that Binance and FTX both received licenses in various jurisdictions when they applied, but Binance “failed to comply with requests from regulators to provide the data they would need for a license.”
O’Leary detailed that FTX spent $3 billion on Binance buybacks, which “stripped [its] balance of assets.” He said: “From my point of view, my personal opinion, these two giants who own the unrelated market together and who grew these amazing businesses in terms of growth, they were at war with each other.” The Shark Tank Star concluded:
One intentionally excluded the other. Maybe there is nothing wrong with that… but it is now a global unregulated monopoly. FTX must be shut down.
“Now, many other reasons, I’m sure, but that’s my personal opinion,” O’Leary clarified without mentioning fraud or other charges against Bankman-Fried this week by the US government & regulators.
O’Leary recently revealed that he was paid $15 million by FTX to be their spokesperson. Following the crypto exchange’s collapse, Mr. Wonderful stated that has been his policy to support Bankman-Fried if there was a new venture. The Shark Tank Star also claimed that he was close to securing $8 billion in order to save FTX from going bankrupt. The former CEO of FTX is being held in the Bahamas and has been denied bail.
What do you think about Kevin O’Leary’s comment on FTX and Binance? Let us know what you think in the comments section.