SkyBridge Capital's founder believes that "Sam put Sam out of business."
Anthony Scaramucci, the founder of global investment firm SkyBridge Capital, recounted the final days of the now-bankrupt crypto exchange FTX, stating that most employees were unaware of the executive decisions leading to the collapse.
The SkyBridge founder discussed his perspective on FTX's downfall during a panel at Consensus 2023.
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Scaramucci recalled hearing negative comments made by FTX CEO Sam Bankman-Fried about Binance CEO Changpeng "CZ" Zhao.
According to Scaramucci, CZ responded to those comments by selling his FTX Tokens (FTT). Although, at that time, CZ called it "post-exit risk management," that arose due to concerns about FTX's financial ties with sister company Alameda Research.
During the discussion, Scaramucci clarified that CZ was not responsible for FTX's bankruptcy, stating, "Sam put Sam out of business."
If Sam was running the business appropriately, <…> the business would have been fine. <…> Some people have got on a stage like this and said, "Well, CZ put Sam out of business." No, no. Sam put Sam out of business by the way he ran that business.
In early November, Scaramucci discovered liquidity problems at FTX after talking to Bankman-Fried's father. Initially believing that FTX could repay depositors, he soon realized the severity of the issue when the liquidity shortfall skyrocketed from $1 billion to $4.5 billion.
Scaramucci quickly flew to the Bahamas to assess the situation at FTX headquarters, where he found "the war room was despondent."
The war room was despondent, and I would say that it was clear to a few people that there was a very small group of people that had done some things that they didn't let the other people into.
He noted that such frauds are usually committed by a small group of people, as larger groups tend to have at least one person with a conscience who exposes the crime.
The way crimes get committed is they get committed by very small groups. It's very hard to commit a crime like this with a large group of people because what you learn about psychology and sociology, there's always a person of conscience that comes out and says, "Hey, I don't want to do this."
FTX filed for bankruptcy in November, with two of its executives and the former CEO of Alameda Research pleading guilty to fraud. Bankman-Fried has also been charged with fraud but maintains his innocence and believes some of the lost funds can be recovered.
Anthony Scaramucci revealed a glimpse into FTX's collapse, attributing the downfall to poor management and a small group's fraudulent actions.
