Shark Tank star Kevin O’Leary confessed to losing millions in the FTX crash. Going further, he threw the blame for the bankruptcy on Binance’s laps during testimony this Wednesday (14). Acting as something of a poster boy for FTX before its bankruptcy, O’Leary’s stance was widely criticized on social media, especially by Changpeng Zhao. However, even though the focal point of the audience was FTX, O’Leary wasn’t the only one attacking Binance. US Senator Bill Hagerty, for example, even hinted that Zhao’s brokerage had links with the Chinese government.
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O’Leary Blames Binance for FTX Crash
Recapping the beginning of the FTX crisis, it all started with an article by CoinDesk exposing cash problems at its affiliate, Alameda Research. Days later, the CEO of Binance stated that he would be selling all FTT tokens, precisely because he no longer trusts FTX. After that, FTX saw a rush of withdrawals, to the point where it realized it could no longer honor its customers’ withdrawal requests. In other words, she was working with fractional reserves, and this is entirely her fault. However, Kevin O’Leary tried to blame the FTX bankruptcy on Binance. During the FTX hearing, held in the US, the Shark Tank star declared:
“Why do you believe FTX went bankrupt?” asked Senator Pat Toomey
“These two giants [Binance e FTX] who own the unregulated market together and have developed these incredible businesses in terms of growth were at war with each other, and one intentionally put the other out of business.”replied Kevin O’Leary.
“Maybe there’s nothing wrong with that, maybe there’s nothing wrong with love and war”continued the Shark Tank star. “But Binance is a massive, unregulated global monopoly. They took FTX off the market.”
Binance CEO responds
The fight was obvious, but future events proved that Changpeng Zhao was right not to trust FTX anymore, a rival in which they invested millions when they saw its potential. Through Twitter, Peter Schiff, a big critic of Bitcoin, criticized the statement by Kevin O’Leary, who had already forgiven Sam Bankman-Fried for his mismanagement. Following, the CEO of Binance also comments on the case.
“I don’t understand how Kevin O’Leary can claim to have lost $15 million on FTX when all $15 million was given to him by Sam Bankman-Fried to leverage FTX. Kevin’s only loss is related to his reputation. A lot of people who aren’t that rich have lost hard-earned money due to his endorsement.”wrote Peter Schiff.
“I agree with Peter on this point”replied Changpeng Zhao, CEO of Binance, countering O’Leary.
Agree with Peter on this one. — CZ 🔶 Binance (@cz_binance) December 15, 2022
O’Leary defends industry regulation
In another excerpt, Kevin O’Leary points out that only 1 of the more than 130 companies linked to FTX did not go bankrupt, LedgerX. According to the Shark Tank star, this happened because of the regulation.
“The only one not in bankruptcy […] is LedgerX. Because? Because it is regulated by the CFTC, 100% regulated”commented. “Lack of regulation has caused problems, and will continue to do so, the evidence is here. The only non-zero entity in the FTX portfolio, the CFTC forced scrutiny, forced transparency, forced proof of where the assets were held.”
“This is proof that you can regulate this asset class.”
Kevin O’Leary highlights the potential of Crypto with Sovereign Wealth, and successes of CFTC Regulation / LedgerX. -US Senate FTX Hearing#CFTC #Crypto #CryptoNews #FTT #FTX #LedgerX #Regulation #SBF #SamBankmanFried pic.twitter.com/zQ1jIX6uK3
— 🥷 Gokhshtein Media (@gokhshteinmedia) December 15, 2022
Lawmakers are losing focus
Taking advantage of the industry’s fragile moment, Senator Elizabeth Warren is trying to pass a bill that aims to end the privacy of self-custodial wallets. Given this, O’Leary responded to Senator Elizabeth Warren by stating that the dollar has been used by criminals for decades. That is, banning cryptocurrencies will not solve any problems that existed before them.
“Coins have been used in drug trafficking since the 1960s. […] the US dollar is also used by criminals all the time.”
Another who was against Warren’s stance was fellow Senator Cynthia Lummis, noting that the subject of the hearing was not cryptocurrencies, but the FTX exchange.
“We have conflicting topics today. Digital assets are not on trial. Fraud and organizations are on trial. So let’s separate digital assets from corrupt organizations.”
Senator Lummis says “digital assets are not on trial. Fraud and organizations are on trial.” ✅ -US Senate FTX Hearing#Crypto #CryptoNews #FTT #FTX #Regulation #SBF #SamBankmanFried pic.twitter.com/3dY1TEKNoj
— 🥷 Gokhshtein Media (@gokhshteinmedia) December 15, 2022
Finally, Sam Bankman-Fried is already imprisoned in the Bahamas, giving a certain taste of justice to the injured parties. However, there is still much to be discussed, mainly to avoid new similar scams. Other than that, it is up to follow crazy bills like the one mentioned above. After all, the conversation is being skewed by some lawmakers, but fortunately, not everyone is buying these ideas.
