A few months before FTX founder and crypto tycoon Sam Bankman-Fried lost his $15.6 billion fortune with his company, he was palling with Bill Clinton in swanky cryptocurrency conference in the Bahamas.
Clinton was a paid speaker at the Crypto Bahamas April 2022 event hosted by the now bankrupt crypto exchange FTX, where Democratic mega donor Bankman-Goreng moderated panel featuring former president and former British Prime Minister Tony Blair. Clinton’s comments were not recorded, but a leaked recording in which she advocated a “do no harm” approach to regulating cryptocurrency, according to industry outlet Trust Nodes.
Clinton also said there was a “temptation to abuse” digital currency, but she praised the emerging technology as “obviously serious” in her speech, Politico reported in April.
“You want to do the right thing by it in the regulatory space,” he said, referring to his administration’s efforts to deregulate financial markets in the 1990s.
The April conference is an expensive, exclusive party for crypto investors, celebrities and world leaders. Katy Perry and Orlando Bloom were photographed in attendance, as were NFL GOAT Tom Brady and his wife Giselle Bundchen, while DJ Steve Aoki and former One Direction singer Liam Payne provided entertainment for conference attendees, who paid for it. above $3,000 for their tickets.
FTX hosted the event in partnership with the salt thought leadership forum, which was founded by Anthony Scaramucci, who briefly served as director of White House Ccommunications for former President Donald Trump.
It is the celebration of the enormous potential for wealth that makes cryptocurrency so enticing. But now, seven months later, the inherent risks of a loosely regulated market are apparent. The extraordinary collapse of FTX from the third-largest cryptocurrency exchange to bankruptcy in the span of a week has left investors stunned, clients fleeing, and lawmakers calling for new regulations in the crypto industry.
“I f—ed up, and should have done better,” Bankman-Fried tweeted on Thursday, grossly understating how his mismanagement left FTX with an $8 billion hole in its budget.
After Bankman-Fried resigned in disgrace, his successor John Ray III – a lawyer who previously oversaw the $23 billion bankruptcy of energy firm Enron – accused the former CEO of allowing a “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 a filing and the US Bankruptcy Court for the District of Delaware. “From compromised system integrity and faulty regulatory oversight overseas, to the concentration of control in the hands of a small group of inexperienced, unsophisticated and potentially compromised people, this situation is unprecedented.”
FTX lawyers said Thursday that Bankman-Fried’s “unconventional leadership style,” “incessant and disruptive tweeting,” and “almost complete lack of reliable corporate records” have complicated efforts to restructure the company. In court filings, they accused the embattled crypto mogul of trying to move assets out of the United States and into the Bahamas, where they would be controlled by the Bahaman government, in an apparent attempt to circumvent US regulators.
Adding to the intrigue is the fact that Bankman-Fried, who has donated about $38 million to Democrats and left-wing causes in the past two years, have lobbied for regulations which would have been beneficial for FTX.
“I’m optimistic that over the next year or so, we’ll see some really important steps forward in the global regulatory environment and the US regulatory environment for cryptocurrencies. You know, it’s been a pretty tough struggle back and forth, I think. , for a moment.. And I think [the] “The industry is to blame for that as much as anybody in the relationship that has developed between, you know, industry and regulators,” Bankman-Fried told FOX Business Network ten months before his downfall.
“But I think there is a light at the end of the tunnel. And I think there are some straightforward policy proposals that can answer for what the regulator wants, while also allowing cryptocurrencies to really grow as an asset class moving liquidity and volume. land,” he added.
US lawmakers have called the FTX crisis a “debacle,” and the House of Representatives will hold hearings in December to probe FTX’s collapse and “broader consequences for the digital asset ecosystem.”
FOX Business’ Megan Henney contributed to this report.