By
Chimamanda U. Martha
April 19th, 2024
Scaramucci stated that it was more likely that FTX, once valued at $32 billion, would end up selling its software and licensure before opening under a new brand.
Skybridge Capital founder Anthony Scaramucci does not think the defunct crypto exchange FTX can be revived any time soon. The financier and former White House communications director explained that many exchanges were not making much money under current market conditions.
“I don’t see how it’s possible to restart FTX. Not a lot of money is being made in these exchanges right now, and so a lot of these exchanges are in the red, and they’re burning off capital that they raised in these private placements, waiting for a new bull market to start and waiting for higher volume,” Scaramucci stated on an episode of The Block’s The Scoop podcast with Frank Chaparro.
Skybridge Capital is uniquely tied to FTX as it invested in the exchange while FTX bought a large stake in the investment company. Although Scaramucci believes that an FTX revival would be a “net positive” for his investment firm as it would provide an avenue for negotiation with the exchange, it would require a green light from creditors and a bankruptcy judge.
FTX’s legal team has previously stated that will explore the feasibility of a revival and will propose a restructuring plan in July that will have to be reviewed by creditors and voted on in the first half of next year. If approved, the plan would go into effect in the second quarter of 2024. Earlier this month, the legal team announced that the exchange’s new leadership had managed to recover $7.3 billion and was working on a revival plan. News of a possible reboot sent the price of FTX’s FTT token surging over 100% from $1.32 to $2.80. Scaramucci stated that it was more likely that FTX, once valued at $32 billion, would end up selling its software and licensure before opening under a new brand.
The financier also commented on Securities and Exchange Commission (SEC) chairman Gary Gensler’s appearance before US Congress last week. He opined that Gensler’s treatment of crypto firms could end up pushing more businesses outside the country.
“Mr. Gensler is a bad faith regulator, and I think he’ll just delay the process of adoption for the US and it’s sad, because other countries will take the lead and we’ll be missing out,” Scaramucci said. “The notion that you would kick crypto out of the country because you got embarrassed by Sam Bankman-Fried I think is an absolute absurdity.”
During his April 18 appearance, Gensler was met with criticism from House Republicans over the SEC’s crackdown on crypto businesses. Among the issues raised was that the watchdog’s regulations were created with traditional markets in mind and did not apply to decentralized currency exchanges. Rep. Patrick McHenry, R-N.C. stated that the agency’s approach was “driving innovation overseas and endangering American competitiveness.”
“Regulation by enforcement is not sufficient nor sustainable,” said McHenry. “You’re punishing digital asset firms for allegedly not adhering to the law when they don’t know it will apply to them.”