CNBC contributor Kevin O’Leary has called his promotional deal with FTX “a bad investment.” Furthermore, he is among a number of celebrities sued for misguiding investors.
Updated Dec 9., 14:45UTC: Former FTX CEO Sam Bankman-Fried stepped into the fray accusing Changpeng Zhao of “lying” about the buyout.
He said: “We initiated conversations around buying you out, and we decided to do it because it was important for our business. And while I was frustrated with your ‘negotiation’ tactics, I chose to still do it.”
Update Dec. 9, 10:10 UTC: Binance CEO Changpeng ‘CZ’ Zhao piled on to add criticisms of O’Leary’s dealings with FTX and Sam Bankman-Fried. CZ implied that O’Leary, who was once a crypto naysayer, changed his tune once he saw a $15 million payday from the now-defunct exchange. O’Leary has even shown ambiguous support for SBF since the collapse of FTX, saying that he doesn’t understand how people can ‘say he’s (SBF) guilty before he’s even tried.’ CZ went on to say that it was foolish for O’Leary to give SBF the benefit of the doubt and stated that he was just a ‘poster child’ used to legitimize fraud. CZ has also been under the microscope as of late due to discrepancies and doubts over Binance’s proof of reserves.
The ‘Shark Tank’star has spoken out about his involvement with the now-bankrupt FTX exchange. Speaking on the outlet’s ‘Squawk Box’ on Dec. 8, O’Leary said he had lost almost all of the $15 million from the FTX payday.
The Canadian investor got paid to act as a spokesman for the now-defunct FTX.com. “Total deal was just under $15 million, all in,” O’Leary admitted before adding:
“I put about $9.7 million into crypto. I think that’s what I lost. I don’t know. It’s all at zero.”
O’Leary was grilled for failing to properly assess the risks associated with investing and promoting the platform. He remained upbeat about the wider crypto ecosystem. “This whole FTX debacle changes nothing regarding the long-term potential of crypto,” he tweeted.
Kevin O’Leary and Other Celebs Under Fire
Several high-profile celebrities and athletes jumped on the crypto bandwagon last year. Now they’re in hot water over it as prosecutors scramble to point fingers and play the blame game.
Tom Brady, Steph Curry, and Larry David were among those sued by investors for promoting FTX. Furthermore, the U.S. Federal Trade Commission (FTC) has targeted crypto companies for misleading advertising.
Kevin O’Leary admitted to falling prey to “groupthink,” adding that none of his investment partners had lost money. He aggressively promoted FTX on social media, touting close connections with Sam Bankman-Fried.
Additionally, he claims to have had more than $1 million of FTX equity. The bankruptcy protection process has rendered this equity useless. He said the balance of a little over $4 million was purportedly eaten up by taxation and agent fees.
SBF in Subpoena Showdown
In related news, SBF will likely face subpoenas for missing a deadline on Dec. 8. He was required to respond by confirming his testimony at two Senate hearings next week but failed to do so.
On Dec. 8, the Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, Sherrod Brown, issued a statement. The joint letter with Senator Pat Toomey called on SBF to testify ‘or else’:
“The Committee has requested that he testify at our upcoming hearing on FTX’s collapse, and will consider further action if he does not comply.”
The “Crypto Crash: Why the FTX Bubble Burst and the Harm to Consumers” hearing will be webcast on Dec. 14.
Additionally, Congresswoman Maxine Waters has also threatened to subpoena him for testimony at a separate hearing on Dec. 13.
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