Investor Kevin “Mr. Wonderful” O’Leary gave more details about his participation in failed crypto exchange FTX and his insight on its former CEO Sam Bankman-Fried (SBF). The crypto trading venue lost billions of its customers’ funds, including O’Leary and other prominent investment firms.
In an interview with CNBC’s Squawk Box, Mr. Wonderful talked about his transition from a crypto detractor to a defender. He claimed the global crypto regulatory environment shifted him to embrace the nascent asset class.
“Mr. Wonderful” went from classifying Bitcoin and crypto as “garbage” to investing millions in digital assets. This investment turned to ashes as FTX collapsed and filed for chapter 11 bankruptcy protection in the United States. A process that is still ongoing.
Before FTX, Mr. Wonderful Had A Reputation For Betting On “Catastrophic Outcomes?”
Sam Bankman-Fried and FTX approached O’Leary to become an investor in the exchange. The “Shark Tank” host put almost $10 million into the company after seeing “unbelievable” interest from U.S. institutions. O’Leary lost the entirety of his $10 million investment, he said:
I felt that getting involved when I was approached by Sam Bankman-Fried that I can get an inside seat (…). The institutional interest in FTX on the U.S. equity was unbelievable. The amount of people that approached saying, “How do I get a piece of this deal?” And I said at that time, I am a paid spokesperson, I can’t bring you in. Not a single dollar that I lost was anyone else’s money except for mine (…).
O’Leary revealed that he was paid $15 million for working as an FTX ambassador. In that sense, his profits from the deal still surpassed his losses by about $5 million.
Kevin O’Leary was paid about $15 million by FTX to be a spokesman and lost most of it (a bit unclear how much it was, according to his statements).
This explains a lot regarding his statements from November 16. Easy to back someone if you get paid millions for it. pic.twitter.com/h75v0p5mdG
— Jan Wüstenfeld (@JanWues) December 8, 2022
Some people who put funds into the crypto exchange due to O’Leary’s endorsement were less lucky. Many will have to wait until the bankruptcy proceedings are completed. They might recover only a portion of their money or none at all.
Addressing the rationale that led O’Leary to trust in FTX and SBF, the investors claimed that his U.S. nationality and that his parents are compliance lawyers working at top universities inspired trust. A U.S. founder runs no other exchange, he said.
O’Leary claims he will try to follow the money and see if he can get it back. The investor should have provided details about his conversations with SBF regarding this issue, but he claims to have the resources to carry out the task.
Mr. Wonderful is set on pushing for an official investigation of recent week events regarding FTX. Only then is he willing to pass judgment on SBF. O’Leary added:
I have been known for decades to invest in entrepreneurs who have had catastrophic outcomes because they often learn from their mistakes. Let’s do the forensic audit. Let’s find out what happened.
Crypto Is Here To Stay
Despite what happened with FTX, O’Leary has stated his intentions to put money into a future SBF-led project. Mr. Wonderful believes that the former crypto exchange CEO might have learned from his mistakes.
I am not scared of investing in entrepreneurs that have had catastrophic failures. Failure is often the best teacher.
— Kevin O’Leary aka Mr. Wonderful (@kevinolearytv) December 8, 2022
For the nascent industry, the investor believes fundamentals are intact. In the long run, digital assets will overcome FTX and provide value for its investors. He said: “the promise of crypto remains; this will not change it.”