Flashback: Bill Clinton hung with Bankman-Fried at $3K Bahamas shindig, called for ‘do no harm’ regulations

Months before FTX founder and crypto mogul Sam Bankman-Fried lost his $15.6 billion fortune and company, he partied with Bill Clinton at a classy cryptocurrency conference in the Bahamas.

Clinton was a paid speaker at the April 2022 Crypto Bahamas event hosted by now bankrupt crypto exchange FTX, where Bankman-Fried Democratic Mega Donor moderated a panel with former President and former British Prime Minister Tony Blair. Clinton’s comments were off the record, but a recording was leaked in which he 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 currencies, but hailed emerging technology as “obviously serious” in his remarks, Reported Policy in April.

“You want to do the right thing in the regulatory space,” he reportedly said, referring to his administration’s efforts to deregulate financial markets in the 1990s.

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Former President Bill Clinton speaks at Temple Emanu-El on November 10, 2022 in New York City. (Michael Kovac/Getty Images/Getty Images)

Sam Bankman-Fried sits down for Bloomberg interview

Sam Bankman-Fried, founder and managing director of FTX Cryptocurrency Derivatives Exchange, during an interview on an episode of Bloomberg Wealth with David Rubenstein in New York, August 17, 2022. (Jeenah Moon/Bloomberg via Getty Images/Getty Images)

The April conference was an expensive and exclusive evening for the who’s who of big crypto investors, celebrities and world leaders. Katy Perry and Orlando Bloom were in attendance, as were NFL GOAT Tom Brady and then-wife Giselle Bundchen, while DJ Steve Aoki and former One Direction singer Liam Payne provided entertainment for conference attendees, who paid over $3,000 for their tickets.

FTX hosted the event in partnership with thought leadership forum SALT, founded by Anthony Scaramucci, who briefly served as White House communications director for former President Donald Trump.

It was a celebration of the enormous wealth potential that makes cryptocurrency so attractive. But now, seven months later, the risks inherent in a weakly regulated market are apparent. FTX’s incredible collapse of the world’s third-largest cryptocurrency exchange into bankruptcy in the space of a week has left investors stunned, customers on the run and lawmakers calling for new regulations on the industry of cryptography.

“I screwed up and should have done better,” Bankman-Fried tweeted Thursday, grossly underestimating how his mismanagement left FTX with an $8 billion hole in its budget.

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Sam Bankman Fried

Sam Bankman-Fried, Founder and Managing Director of FTX Cryptocurrency Derivatives Exchange, speaks at the Institute of International Finance Annual Members Meeting in Washington, DC on October 13, 2022. (Ting Shen/Bloomberg via Getty Images/Getty Images)

After Bankman-Fried resigned in disgrace, his successor John Ray III – the lawyer who previously oversaw the $23 billion bankruptcy of energy company Enron – accused the former CEO of allowing “a complete failure company controls”.

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of reliable financial reporting as has happened here,” Ray said in a file in the United States Bankruptcy Court for the District of Delaware. “From the compromised integrity of systems and faulty regulatory oversight overseas, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented. “

FTX attorneys said Thursday that Bankman-Fried’s “unconventional leadership style”, “his incessant and disruptive tweets” and “the near total absence of reliable corporate documents” have complicated the company’s restructuring efforts. ‘company. In court filings, they accused the embattled crypto mogul of trying to move assets out of the US and into the Bahamas, where they would be under the control of the Bahamian government, in an apparent effort to circumvent the US regulators.

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FTX Logo

In this photo illustration the FTX Token (FTT) stock chart seen on a smartphone screen. (Photo by Rafael Henrique / SOPA Images/Sipa USA)Not used Germany. (Rafael Henrique/SOPA Images/Sipa USA/Reuters Photos)

Adding to the intrigue, the fact that Bankman-Fried, who has donated about $38 million to Democrats and left-wing causes over the past two years, lobbied for settlements this would have been favorable to FTX.

“I’m optimistic that over the next year we’ll see some really substantial progress in the global regulatory environment and the US regulatory environment for cryptocurrencies. You know, it’s been a pretty tough fight in the two meanings, I think, for a while. And I think [the] the industry is as much to blame for this as anybody else in terms of the relationships that have developed between, you know, industry and regulators,” Bankman-Fried told FOX Business Network ten months prior. his fall.

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“But I think there is a light at the end of the tunnel there. And I think there are simple policy proposals that could solve what regulators want, while allowing cryptocurrencies to really grow a lot as an asset class moving liquidity and volume ashore,” 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 “the broader implications for the digital asset ecosystem”.

Megan Henney of FOX Business contributed to this report.

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