Kevin O’Leary on why he invested in FTX and his recent conversation with Sam Bankman-Fried

BECAUSE THERE IS A LOT OF QUESTIONS ABOUT WHAT HAPPENED. I KNOW THAT YOU'VE LOST MONEY IN THE PROSE OF ALL OF THIS. >> THAT IS AN UNDERSTATEMENT. >> AND I WANT TO UNDERSTAND HOW THE INVESTMENT AND THIS AMBASSADORSHIP HAPPENED AT THE TIME THAT IT HAPPENED, YOU DID DISCLO DISCLOSE IT BUT I WANT HOW YOU WENT FROM CALLING CRYPTO GARBAGE TO DECIDING THAT THIS WAS SOMETHING THAT YOU WERE GOING TO STAND BEHIND >> YES, I RECALL THAT CONVERSATION CALLING IT GARBAGE RIGHT HERE ON THIS SHOW IN 2017. THAT WAS A TIME WHEN A NEW YORK HOTEL WAS BEING TOKENIZED HERE AND WAS LOOKING AT THAT AND THE REGULATOR LET ME KNOW THEY WERE NOT HAPPY WITH THAT IDEA AND THAT IS WHEN I STEP -- I STD AWAY FROM THIS BECAUSE THE REGULATORY ENVIRONMENT WAS NOT GOOD AND THEN I SAW ETHEREUM AND THEN I SAID THE WORLD IS CHANGING AND I HAVE TO BEEN AN INVESTOR I'M AN INVESTOR IN THE LARGEST REGULATED EX CHANGE IN CANADA CALLED WONDERFY AND WE'RE REGULATED BY THE OSC, I HAVE MY ACCOUNTS UP THERE. BUT I FELT THAT GETTING INVOLVED WHEN I WAS APPROACHED WITH SAM BANKMAN-FRIED THAT I COULD GET AN INSIDE SEAT ON WHAT WAS CONS CONSIDERED THEN, I HAVE TO TELL YOU, THE INSTITUTIONAL INTEREST ON FTX ON THE U.S. EQUITY WAS UNBELIEVABLE THE AMOUNT OF PEOPLE APPROACHING ME AND SAID HOW DO I GET A PIECE OF THIS DEAL I SAID I'M A PAID SPOKESPERSON, NOT A SINGLE DOLLAR I LOST IS ANYBODY ELSE EXCEPT MINE AND THAT IS IMPORTANT FOR ME BECAUSE THAT IS AN ISSUE. >> HOW MUCH WERE YOU PAID. >> TOTAL DEAL WAS JUST UNDER $15 MILLION ALL IN INCLUDING A BUNCH OF AGENTS AND THAT I HAD TO PAY BECAUSE I NEEDED SAG AFTER RELEASE TO DO COMMERCIALS FOR IT WHEN DID THAT I PUT ABOUT $9.7 MILLION AT CRYPTO IT IS ALL LOST BECAUSE MY ACCOUNT GOT SCRAPED, ALL OF THE DATA AND THE COINS AND EVERYTHING AND THEN I LOST THE MONEY I INVESTED IN EQUITY AS WELL THOSE ARE ZEROS TOO. IT WAS NOT A GOOD INVESTMENT I DON'T MAKE GREAT INVESTMENTS ALL OF THE TIME. LUCKILY I MAKE MORE GOOD ONES THAN BAD ONES AND THAT IS WAS A BAD ONE. >> WHEN YOU MADE THIS ARRANGE. BACK IN AUGUST 10th, 2021. YOU SAID THE FOLLOWING YOU SAID TO FIND CRYPTO THAT MET MY OWN RIGOROUS STANDARDS OF COMPLIANCE, I ENTERED INTO THIS RELATIONSHIP WITH FTX. IT HAS SOME OF THE BEST CRYPTO EX CHANGE OFFERINGS I'VE SEEN ON THE MARKET EVEN AS A SPOKESPERSON AND AMBASSADOR FOR THIS COMPANY, WHAT KIND OF DILIGENCE DID YOU DO AROUND THIS ISSUE OF COMPLIANCE GIVEN WHERE WE SIT TODAY. >> I KNOW ALL OF THE INSTITUTIONAL INVESTORS IN THIS DEAL WE ALL LOOK LIKE IDIOTS. LET'S PUT THAT ON THE TABLE. WE RELIED ON EACH OTHER'S DUE DILIGENCE AND ANOTHER INVESTMENT THEME THAT I FELT DROVE A LOT OF INTEREST IN FTX, SAM BANKMAN-FRIED IS AN AMERICAN HIS PARENTS ARE AMERICAN COMPLIANCE LAWYERS THERE WERE NO OTHER AMERICAN LARGE EXCHANGED TO INVEST IN, CRYPTOCURRENCY AS AN INFRASTRUCTURE PLAY. WE SAID WHO IS COMING TO THIS DEAL WE KNOW IT WAS IGER -- >> THIS SOUNDS LIKE GROUP THINK. DID YOU KNOW THERE WAS NO CFO? >> LOOK, AT THE END OF THE DAY, TO SAY THAT THERE WAS NO CFO IS ALSO A BIT OF A FALSEHOOD. THIS WAS A FNASCENT INDUSTRY WITHOUT TRADITIONAL NAMES. THAT IS JUST WAY IT WAS. IN RETROSPECT, YES, IT IS A MISTAKE. HOWEVER, I FEEL OBLIGED AT THIS POINT TO GO TO THE END OF THIS PARTICULARLY -- >> WHAT DOES THAT MEAN >> IT MEANS THAT I NEED TO FIND WHERE THE MONEY WENT I'M GOING TO START WITH MY OWN JOURNEY WITH MY OWN ACCOUNT. SAM BANKMAN-FRIED REACHED OUT TO ME LAST ZSATURDAY AND I SAID I' JUST ONE OOINVESTOR AND MY ACCON HAS A ZERO IN IT AND THERE ARE NO ACCOUNTING RECORDS. WHERE DID THE MONEY GO AND TO THE EXTENT YOU COULD HELP ME, TELL ME, POINT ME IN THE DIRECTION BECAUSE I WILL ON BEHALF OF THE OTHER SHAREHOLDER GO FIND WHERE THIS MONEY IS. THE NEXT DAY WE TALKED FOR OVER AN HOUR AND HE WALKED ME THROUGH HIS SCENARIO AND I LEARNED A LOT. NOW I DON'T -- >> WHAT DID YOU LEARN? >> SORRY I LEARNED WHAT WAS THE LARGE DRAW DOWN OF YOUR CAPITAL. WHERE DID THE CASH GO? ONE OF THE BIGGEST USES OF CASH WAS TO BUY BACK HIS SHARES FROM BINANCE, WHICH OWNS 20% OF HIS EXCHANGE AND THE REASON HE HAD TO DO THAT ACCORDING TO HIM WAS THIS EVERY TIME THEY APPLIED FOR A LICENSE, THEY GOT JAMMED UP WITH THE OWNERSHIP IS OPAQUE AND THAT COST HIM A LOT TO BUY BACK. A COUPLE OF BILLION DOLLARS. >> DO YOU THINK HE WAS TAKING CUSTOMER FUNDS TO DO THAT. >> DID HE TAKE THAT PLANMONEY FM CUSTOMERS TO GET IT. >> AND THE ONLY WAY TO ANSWER THAT QUESTION AND I TOLD HIM AND' GREED, YOU START THIS JOURNEY WITH ME AND WHEREVER THE CHIPS FALL, THAT IS ON YOU BECAUSE, YOU KNOW, WE'RE TALKING ABOUT THIS I'M GOING TO PURSUE IT I AGREED LAST NIGHT WHEN PAT TOOMEY CALLED ME TO SIT ON THAT COMMITTEE NEXT WEEK. I WILL BE A WITNESS THERE. >> YOU PLAN TO TESTIFY >> I

Channel: CNBC Television

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Id: pIXq1pfvG0g

Length: 5min 45sec (345 seconds)

Published: Thu Dec 08 2022