Shark Tank

Kevin O’Leary lost the $15M he was paid to be FTX’s spokesperson

Kevin O’Leary fessed up to making a massive mistake with FTX and is working to find out where his money went amid the bankruptcy.

Shark Tank star and investor Kevin O’Leary, known in some circles as Mr. Wonderful, has claimed he has all but lost the $15 million FTX paid him to be its official spokesperson.

Speaking at CNBC’s Squawk Box on Dec. 8, O’Leary outlined that after taxes, agents fees, a $1 equity investment into FTX, and buying a whole lot of crypto that’s now stuck on the FTX exchange, he’s got nothing left to show for his time with FTX:

“Total deal was just under $15 million, […] I put about $9.7 million into crypto. I think that’s what I’ve lost. It’s all at zero, I don’t know cos my account got scraped a couple of weeks ago. All the data, all the coins, everything.”

“It was not a good investment […] I don’t make good investments all the time, luckily I make more good ones than bad ones, but that was a bad one,” he added.

He will probably be just fine without the funds, however, as the 68-year-old is estimated to have a net worth of around $400 million — if such estimates are anything to go by.

Mr. Wonderful was also questioned on what initially drove him to jump on the FTX bandwagon back in August 2021, given that he previously indicated that he held back from crypto in its early days due to his own rigorous compliance standards.

In response, he essentially fessed up to making a massive error, noting “I obviously know all the institutional investors in this deal, we all look like idiots, let’s put that on the table.”

“We relied on each other’s due diligence but we also relied on another investment theme that I felt drove a lot of interest in FTX. Sam Bankman-Fried is an American, his parents are American compliance lawyers. There were no other American large exchanges to invest in if you wanted to invest in infrastructure plays,” he said.

O’Leary reiterated that he is currently working to find out where his capital on FTX actually went and how he can get it back. He also added that he has “agreed” to testify at the upcoming Senate Committee hearing set for Dec. 14.

Despite the whole debacle, O’Leary has previously said he would still have SBF on his team, and in a tweet on Dec.8, he reiterated that he is not scared off investing in entrepreneurs that have massive failures as “failure is often the best teacher.”

You invested in a fraud – not an entrepreneur

— sassal.eth (@sassal0x) December 9, 2022

During another interview with Yahoo Finance on Dec. 6, O’Leary stated that SBF should be treated as innocent until proven guilty, as he called for FTX to be audited in the wake of its collapse.

“I am of the ilk and of the group of people that says, ‘You’re innocent until proven guilty.’ That’s what I believe. And I want the facts. And so, if you tell me that you didn’t — you did or didn’t do something, I’m going to believe you until I find out it’s a falsehood,” he said.

Bear market will last until crypto apps are actually useful: Mark Cuban

The billionaire investor said a bigger focus on applications and utility outside of finance would bring more back to the crypto space and possibly reverse the declining market.

Mark Cuban, the billionaire entrepreneur known for his role as one of the main investors on the reality television show Shark Tank, said the crypto bear market won’t be over until there’s a better focus on applications with utility.

He also doesn’t think the market has hit “cheap” prices yet.

Cuban has stated in the past around 80% of his non-Shark Tank portfolio was in crypto. Appearing on a June 23 episode of the Bankless Podcast, he was asked how long he believes the current crypto bear market will last:

“It lasts until there’s a catalyst and that catalyst is going to be an application, or we get so low people go ‘fuck it I’ll buy some.’”

He believes a better focus on applications with utility will pull crypto from its slump and with so many apps focused on financial technology or collectibles, the launch of a business focused application would be one of such events that could spark a reversal for markets.

Using the example of a “decentralized version of Quickbooks,” a small business accounting management software, Cuban predicted a rush of users if something like that launched.

Despite analysts predicting that Bitcoin (BTC) as well as many other cryptocurrencies have hit a price bottom, Cuban says “it’s not cheap yet” when analyzing the high market capitalization of some projects:

“You look at the market caps, and you see it’s a billion dollar plus market cap or $6 billion or $8 billion or $40 billion you don’t look at that and go ‘that’s cheap.’ If you remember back to DeFi Summer, these things were selling for less than a penny and their market caps were in the hundreds of millions.”

He adds even with lower market cap cryptos “there’s no utility,” and gives an example of the decentralized exchange (DEX) SushiSwap (SUSHI) token as a “relatively cheap” buy with its $215 million market cap, but added:

“You get paid it if you’re a liquidity provider, but then who’s going to buy it from you? What’s the reason to buy it from you?”

Cuban believes mergers between different protocols and blockchains will eventually see the crypto industry consolidate, as “that’s what happens in every industry.”

“I’d rather get with somebody who says ‘let’s do a roll-up,’” with Cuban saying that he’d support a merge of various blockchains, close others and then move applications and communities over to just one and offer a token exchange or bridge from the closing blockchains to port users over:

“Now all of a sudden your user base is 10x, you still have a problem of better applications, you still have to have some reason people want to use that blockchain but at least you may be able to have a better community to come up with ideas because otherwise you’re gone.”

With the crypto space having various sub sectors such as layer 1s, layer 2s, nonfungible tokens (NFTs) and decentralized finance (DeFi) tokens, Cuban was asked which he was most optimistic on.

Cuban said he was particularly interested in carbon offset DeFi tokens, which he burns to offset his own personal carbon footprint. He added that while not everyone cares about offsetting their carbon emissions, it was the “easiest way” in comparison to buying carbon offsets from a broker, which he claims is “a pain in the ass.”

Ultimately though, Cuban said “all of them have potential, that’s why they got all this money, all of them have a reason why they think they’re better and will succeed.”