Wall Street veteran Anthony Scaramucci was badly burned by the downfall of crypto exchange FTX and its disgraced founder Sam Bankman-Friedbut he isnt letting it deter him from the cryptocurrency industry, even when former FTX executives are involved.
The FTX experience overall was extremely disappointing, Scaramucci told Fortune in a recent conversation. Sam is extremely intelligent, and even likable, but sociopathic enough to destructively mislead colleagues and even family. From an early stage, he put measures in place to dupe those conducting due diligence and oversight.
Representatives for Bankman-Fried and FTX did not respond to Fortunes request for comment.
The rapid rise to success of FTX and its founderalso known as SBFsaw him become a prominent figure in the business world, gaining major investment from big-name organizations and A-listers, as well as a slew of media attentionincluding from Fortune.
It all came crashing down in November when the company collapsed in just 48-hours, resulting in bankruptcy and SBF being charged with fraud.
Mere months ago, Scaramuccis own involvement with FTX appeared to be going well, with the SkyBridge Capital founder fundraising with SBF in the Middle East just weeks before FTXs spectacular implosion.
Now, Scaramucci is one of many investors facing massive losses from FTXs downfall, telling Markets Insider last month that he got just $400,000 back on his $10 million investment in the company. SkyBridge, meanwhile, saw its biggest fund tumble 39% last year due in part to its bad bet on FTX.
Funding former FTX execs new start-up
Despite his bad experience, Scaramucci has decided to fund a new crypto software company established by Brett Harrison, the former president of FTXs U.S. arm.
Scaramucci confirmed in a tweet last month that he was investing in Harrisons new start-up, saying he was proud to be injecting capital into the company and encouraging its founder to go forward [and] dont look back.
Bloomberg later revealed that Scaramucci would be investing his own personal money into Harrisons new crypto venture, which is reportedly seeking funding at a valuation of up to $100 million.
The company is planning to build software that will allow crypto traders to write algorithms for their strategies and access various types of crypto markets, according to Bloomberg.
Scaramucci has not revealed how much he invested in Harrisons company.
Harrison stepped down as president of FTX U.S. less than 18 months into the role, around two months before the company declared bankruptcy and its spectacular implosion unfolded.
The defunct crypto exchanges former U.S. boss said in a Twitter thread last month that he had major concerns about how Bankman-Fried was running FTX, but that he never would have guessed there was fraud involved.
Perhaps Scaramucci can relate to leaving a job because of disagreements with the bossthe founder of Skybridge Capital served as former President Donald Trumps communications chief, but was sacked after just 10 days. His latest career pivot is into the world of content creation, having launched book club-style podcast Open Book last week.
In conversation with Fortune, Scaramucci defended Harrison, describing him as a talented person with integrity who was in the wrong place at the wrong time when it came to FTX.
FTX U.S. was walled off from the criminal activity of the international business; he was not in Sams inner circle and was not involved in any of the nefarious activity, he said. [Now] he is tackling an important hurdle to greater institutional crypto adoption, and I think he will be successful.
Scaramucci argued that the FTX ordeal highlighted the need for regulators to urgently learn more about blockchain technology and find ways to regulate activity in the spacebut without completely stifling innovation.
In light of Scaramuccis involvement with FTX and its alumniand crypto assets coming off of a terrible year in 2022the hedge funders outlook on cryptocurrencies remains relatively positive.
Crypto is at an inflection point where only the high-quality projects and people will survive in the industry over the next 12 to 18 months, he speculated. While the Federal Reserve may slow its pace of monetary tightening, the zero-interest-rate QE era is over and investors will be more discerning about how and where they allocate capital.
He added: I believe the extremely negative sentiment today on the entire spaceincluding Bitcoin, Ethereum and Blockchain-utility oriented projectsis becoming a contrarian indicator.
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