Months before FTX founder and cryptocurrency mogul Sam Bankman-Fried lost his $15.6 billion fortune and his company, he was chatting with former President Bill Clinton at a major cryptocurrency conference in the Bahamas.
Clinton was a paid speaker at the April 2022 Crypto Bahamas event hosted by now-defunct cryptocurrency exchange FTX, where Democratic mega-donor Bankman-Fried moderated a panel featuring former president and former British Prime Minister Tony Blair. Clinton’s comments were off the record, but according to industry outlet Trust Nodes, a post in which she advocated a “do no harm” approach to regulating cryptocurrency was leaked.
Clinton also said there was an “inclination to abuse” digital currencies, but she praised the emerging technology as “obviously serious” in her remarks, Politico reported in April.
“You want to do it right in the regulatory space,” he said, referring to his administration’s efforts to regulate financial markets in the 1990s.
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The April conference was an expensive, exclusive party for a who’s who of major crypto investors, celebrities and world leaders. Katy Perry and Orlando Bloom were in attendance, as were NFL great Tom Brady and his then-wife Giselle Bündchen, while DJ Steve Aoki and former One Direction singer Liam Payne provided entertainment for conference attendees who paid more than $3,000 for tickets.
FTX co-hosted the event with SALT, a thought leadership forum founded by Anthony Scaramucci, former President Donald Trump’s brief White House communications director.
It was a celebration of the enormous wealth potential that makes cryptocurrency so enticing. But now, seven months later, the inherent risks of a freely regulated market are becoming apparent. FTX’s incredible collapse from the world’s third-largest cryptocurrency exchange to bankruptcy within a week has left investors stunned, customers fleeing and lawmakers calling for new regulations on the cryptocurrency industry.
“I was ready and should have done better,” Bankman-Fried tweeted Thursday, explaining how she is managing the FTX with an $8 billion hole in its budget.
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After Bankman-Fried resigned in disgrace, her successor, John Ray III – the attorney who had previously overseen the $23 billion bankruptcy of energy firm Enron – accused the former CEO of allowing a “total failure of corporate control.”
“Never in my career have I seen such a complete failure of corporate control and complete absence of reliable financial information as occurred here,” Ray said. said in his application in the United States Bankruptcy Court for the District of Delaware. “From broken systems integrity and flawed regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this is unprecedented.”
Bankman-Fried’s “unorthodox leadership style,” “her persistent and disruptive tweets” and “almost complete absence of reliable corporate records” have hampered the company’s restructuring efforts, FTX attorneys said Thursday. In court filings, they accused the embattled crypto tycoon of trying to move assets out of the US and into the Bahamas, where they would be under the control of the Bahamian government in an apparent attempt to circumvent US regulators.
Legislators will conduct an investigation into the collapse of the FTX in the December court
Adding to the intrigue is the fact that Bankman-Fried, who has donated nearly $38 million to Democrats and left-wing causes in the past two years, is lobbying for regulations that would be favorable to FTX.
“I’m optimistic that over the next year, we’re going to see some significant steps forward in the global regulatory environment and the U.S. regulatory environment around cryptocurrencies. You know, it’s been a pretty uphill battle, I think, for a while. And I think [the] As you know, the industry is as much to blame as anybody in terms of the relationship that developed between the industry and the regulators,” Bankman-Fried told FOX Business Network 10 months before the collapse.
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“But I think there is a light at the end of the tunnel. I think there are some simple policy proposals that can address what the regulators want, while also allowing cryptocurrencies to really grow as an asset class that moves in liquidity and volume. Onshore,” he added. did.
US lawmakers have called the FTX crisis a “debacle” and the House of Representatives will hold hearings in December to examine the FTX collapse and the “broader implications for the digital asset ecosystem.”
FOX Business’ Megan Henney contributed to this report.