Shark Tank investor and FTX spokesman Kevin O’Leary lays some blame on FTX’s collapse on its rival Binance.
Key Details
- O’Leary submitted written testimony on Wednesday to the Senate Committee on Banking, Housing, and Urban Affairs’ FTX investigation.
- Afterward, he accused rival exchange Binance of attempting to put FTX out of business.
- “[Binance and FTX] were at war with each other and one put the other out of business intentionally. [Binance is now an] unregulated global monopoly,” he says.
- This echoes founder Sam Bankman-Fried’s (SBF) previous claim that Binance “played” FTX.
- O’Leary also took the opportunity to defend the efficacy of blockchain and cryptocurrency technologies from criticism, saying the FTX shouldn’t harm the reputation and potential of crypto.
- The Binance CEO says: If O’Leary “is looking for someone to blame for the implosion of FTX, he should start by wagging his finger at his investment partner, Sam, and then perhaps at the man in the mirror.”
Why it’s News
Both O’Leary and SBF are correct in alleging that Binance played a role in the collapse of FTX, but that only came in revealing its liquidity crisis to the public. As we previously reported, Binance is having its own problems cooling investor fears of a subsequent liquidity crisis. Binance only accelerated problems that already existed and it hurt itself in the process.
“There’s little evidence to back up O’Leary and Bankman-Fried’s assertion that FTX may have emerged unscathed, considering the mounting allegations FTX engaged in several illegal business practices,” says Forbes.
The collapse of FTX has harmed the entire crypto ecosystem, and politicians are eager to crack down on the cryptocurrency market for being unregulated.
Backing up a Bit
Kevin O’Leary was one of several big-name personalities to endorse FTX at its height, as a leading voice in cryptocurrency. He personally had leaned into the cryptocurrency markets and fully embraced the technologies, investing 10.5% of his portfolio into crypto and losing a significant amount during the fall of FTX. He may have lost as much as $15 million of his wealth, Forbes reports.
“I understand why many leaders in the banking industry are open skeptics, calling for the banning of these new crypto software technologies. Disruption is always uncomfortable at first, and entrenched businesses abhor new competition, but it has been proven time and time again that disruption is absolutely necessary in advancing the economy,” he says.
SBF has spent the past two weeks trying to publicly apologize and deflect fraud allegations, appearing at the New York Times Dealbook Summit and on Good Morning America to defend his actions as unintentional mismanagement. The Securities and Exchange Commission subsequently charged him on Tuesday with eight counts including wire fraud, directly alleging he knowingly lied to the public.