Apr 27, 2023

SkyBridge Capital founder and managing partner Anthony Scaramucci joins "First Mover" live at Consensus 2023 to discuss the collapse of crypto exchange FTX and the state of crypto regulation in the U.S. Plus, his thoughts on SEC Chairman Gary Gensler's performance and the future of CBDCs.

Video transcript

All right, joining us now to discuss the crypto markets and more is Anthony Scaramucci Skybridge Capital, founder and managing partner. Welcome. It's good to be here. Thank you guys for having me. It's great to have you here. Now, let's begin with what you're doing here at consensus. You've heard? Why? I'm excited. What are you excited about? Well, I have to confess, this is my first time at consensus. How about that? So hopefully, I know, hopefully it won't be the last time. It's like what they say about Texas, right. As soon as I heard about it, I got here. But uh no, I'm super excited to be here. Congratulations on the event and I'm here to talk a little bit about FTX, a little bit about our business. We're having a great quarter. So we've got some investors here that we're talking to and taking one day at a time. Yeah, on the topic of FX, you're going to be joining former FX U President Brett Harrison on a panel later today. We'd love to hear your opinion. What should crypto exchanges be doing differently in light of FX? Well, you know, I'm going to answer from the regulatory side if that's ok. I actually think the regulators have to do something different. The, the regulators in the United States are swinging left and right. If, if you had asked me before Sam's demise, it seemed like there was going to be a collection of regulators that were going to allow him to get margin approval in the United States for FDX US. And there was going to be a, let's call it a birthing of the crypto markets in the United States as a result of the FTX debacle, the pendulum has gone the other way now. And you've got things like operation Joe 0.2 0.0 and you've got them trying to deba and they're suing people like coin base as an example. And so for me, I think this is a regulatory issue. We've got to get better regulatory clarity in the US, find out direction where they're gonna go before we can really tell the exchanges what to do. So, just a rapid file for you because you mentioned quite a few things. Yeah. Are you still friends with SPF? Well, I haven't talked to Sam since uh November the seventh. So I don't know if you wanna say Fred, look, I think, I think I only asked this. Yes, you, you still stood out for him as a good person even after, which was quite interesting. I think you're confusing with Kevin o'leary, you know, II I didn't, I didn't I, I said, I like Sam. I'm not, I'm not going to, uh, revise history. I had a relationship with him. I considered him a friend. I think he betrayed me and then he betrayed his people and he betrayed his customer base and so forth. And so I certainly don't like that about him. So I haven't talked to him since November 7th, but I don't want to be one of those people that's revising history and trying to pretend that I didn't have a good, would have never taken him to the Middle East if I didn't trust him and like him. So that I think what Sam perpetrated was a full on betrayal. All right. So, ok, so just going back to what you said, sorry about that, uh she asked what the crypto exchanges do differently. I just want to get a sense. You said, well, regulators need to do something differently. But how does, how do crypto exchanges get regulators to do something? Well, that's my point. So until you tell me what the regulator is going to do, you can't really advise the crypto exchanges. You know, Gary is on tape at mit explaining that none of these uh, cryptocurrencies are actually securities. They don't meet the how he desk. And now he's saying as a politician that they all do. And so, uh what is it one way or the other, you know, coin base is actually suing the regulator looking for more clarity and the regulators are trying to regulate this industry off of a 1933 footprint. And so this would be like me telling you, we created the automobile and we just recently created the airplane, take the driver's ed manual and apply it to the air traffic. Ok? You can't use 1930 1940 regulation to regulate this industry. This industry needs to be regulated differently. Yeah, this call for clarity is one that we hear time and time and time again and nothing is happening with the regulators. What do you make of exchanges going, um, overseas, you know, coin base recently said, like, maybe they're going to do it, maybe they're gonna leave the US. Do you think that's what should be happening? Well, I think they've already done that. Right. I mean, they, they, they basically have gotten a license now in Bermuda. Uh, Brian was in London, uh, showing himself on Twitter in London. I think they have to prepare themselves for the potentiality that the regulators in the US and some of the politicians are trying to push the industry off the shore of the United States. So that would be a near term tragedy for the US. It would slow US down. It would, it would crimp our intellectual innovation and I hope they don't do that. But I mean, the good news about the United States is you get a circulation of elites. And so, uh hopefully Gary's, uh, tenure at the SEC is short lived and we'll find somebody that's more practical. Uh, and somebody that wants to bring these jobs to the US, what, what he's doing right now. Uh I think he has to explain to people. He won't. Uh, you've got a lot of Republicans in the house that are trying to ask him for that. Uh But he's not providing any clarity. So just uh, to be more clear about this, you think he's already done it. But if you were advising him directly, would you tell him to do it that he go offshore? Brian Armstrong? No, I would not tell him to do that. What I would tell him to do is what he did last week is meet with the sec, meet with members of congress. Um I want to take you back a story. I think it's important when you had the banking debacle in the 19 twenties, you had very smart politicians like Franklin Roosevelt. He said, ok, let's go out to the banking industry, let's have them self regulate, self regulatory organization and let's build laws to create more transparency to reduce fraud. And then he hired Joe Kennedy. He said he's gonna put a Fox in charge of the Henhouse as Jack Kennedy's dad, who was a stock swindler back in the day and there was a process in place. If the regulators did something very similar to what would happen in the 19 thirties, you'd have great regulatory clarity around the Cryptocurrency industry. And no, I don't want Brian to leave. I would not recommend that Brian leave. I would want Brian to work with other industry leaders that are ethical and are trying to do the right thing to influence the Congress so that we don't lose the mantle of financial services leadership that we've had for the last 125 years. Realistically, can he do that? Let's say Congress just not prioritizing any crypto regulation at the moment. Can he do that? Not in the, not with the current sec chairman? I don't think he can do it with the current SEC. I'm, I'm asking should he be talking to the SEC chairman or should you be talking to Congress? Because it's, it's a combination. He's got to talk to the congressional leaders and the good news is there's a large swath of congressional leaders in a bipartisan way that believe in crypto. Um And so that, that would be step one, talk to the congressional leaders, step two. We have to work on uh you, you, you gotta get Gary out of there. OK. I mean, so one way or the other, either we have to have a 2024 election that knocks him out of the seat or people have to look around and say, hey, why do we wanna lose us? Financial services leadership where we've been the leader of the world on this stuff for more than a century. Why do we want to do that? Because there's a couple of small minded politicians uh that think that this is the right thing to do when you and I or maybe not, but I'll speak for myself, know that it's the wrong thing to do. Yeah. Bloomberg recently reported that since stepping down as president of FTX US, Brett Harrison raised 5 million for a new crypto startup called architect. And you were one of the investors, tell us why you felt it was necessary to invest in that. Well, listen, I'm a big believer in loyalty. I'm a big believer in uh I don't want Brett who like myself had a bad outcome with Sam Bank and freed what we do in our societies, we have a tendency to blame victims of fraud. Uh And so Brett wasn't part of the fraud and there's a lot of people that are tarring and feathering him. The media has gone after him. There's twitter screeds against him, but I consider him a friend. And so in my life and in the neighborhood I grew up in, you run towards your friends when they have situations like that, you don't run away from them. And so I thought it was very important for me. And again, this is my personal money. It's not my funds, money, it's from my family office. My son has a fund that puts some money in there which has my money and I put some personal money in the business because I'm a big believer in Bret. Uh And I think it's a big lesson for people uh that you stay in things. You don't, you don't leave your friends. Uh When they're in the, in the middle of a bad situation, that's, that's uh morally speaking, that's a value. I think we all can agree with. We, we look at, especially in this industry right now. OK. We are so much better together. I'm a big believer in collaboration, not competition. Uh And so it's important for me and for Skybridge to be behind bread at this time. Yeah. So I just, uh there was a session yesterday, I'm just gonna bring that up. But Senator Ted Cruz, uh as you know, has proposed a national ban on U CBD C. Uh, you had governor proposing a similar measure in Florida. He's got privacy concerns yesterday and I was covering the session ex CFC Commissioner Chris Carlo. He gave a speech here at the main stage. He said CCS are coming whether Americans like it or not and whether the US chooses to lead or not. Where do you stand on this debate? Well, you know, I'm more of a libertarian, so I'm probably in Senator Cruz's camp and Governor Dean Camp, but I do agree that they're coming, whether we like it or not. I guess the real question is, what are we doing with the US? Dollar for me? I want the dollar to maintain its leadership at least as a fiat reserve currency. And so the question has to be, can it maintain that leadership without having a CBD C? I think the answer is yes. I think somebody like Jeremy Lair, if you bring him on the air, he would tell you yes, we can get this solution from the private sector and a result of which you can have the dollar, maintain its mantle of leadership without having the privacy concerns for your citizens. And if that was the case, then you're OK with it. Yeah, I would prefer not to have a US Federal Reserve CBD C but I do want the dollar to maintain its reserve currency status in the fiat world for many different reasons. Yeah. Before we wrap up here, I want to ask you about NFTS and elections. So former President Trump announced the release of series two of his NFT collection. And I, I just want to get your opinion on what this means for upcoming elections and, and NFTS. Do you think we're going to see how I want? I want President Trump to make so much money that he drops out of the race. And I was hoping that stupid that he had, was gonna go to the moon and I want those NFTS to make him so much money that he's like, ok, I don't want to be in politics anymore. That's my dream for President Trump. Is it gonna come? True? I have no idea. But man, I do pray for that, you know, come on, we're going to have Joe Biden and President Trump again. I mean, this is one of the greatest countries in the history of the world. And we're going to have these two guys as the guys running for the leadership of this country at this hour when we have so many complex problems. That is ridiculous. No elaborate. What do you mean? Because that's what it's heading right now. Elaborate. I mean, I think, I think it's prima facia obvious that our political system is, is failing the American electorate. Now, if you're cynical, you'll say that we're getting the politicians that we deserve. But I don't think it's really that I think the system is broken and I think that we haven't had a appropriate constitutional amendment since the 1965 Voters Act and we have to break this stronghold of these 200 year old fossils that are still running the country. Ok. So you have a combination of gerrymandering and campaign finance spending that has run wild and it's creating a perpetual class of political establishment that is failing the country. They only care about their own personal power but not serving the American people. And so this is a thing that should be very upsetting to everybody listening to this and these people are not focused on what we need to do. We have to reform our entitlement spending. We have to right size our educational programs, we have to rebuild our infrastructure and we need 10 and 15 year plans from the American government instead of these nonsensical spats on cable news. And so that, that's where I am, you know, and the Trump name calling and all the bizarreness that comes with him and listen, I work for the guy. He's intellectual vacuous, he has no executive management skills and anybody that had their own career or had their own money or they were a general uh spoke out against them. It was only the politically expedient politicians that spun like weather veins to stay with them. So I guess my question is that he's got NF DS and does his NFTS getting sold out in a day for the second time, the first time also when he debuted them, they got sold out in a day. Does it mean anything for the NFT market or is it exclusively about Donald Trump and his followers? You know, I think it means something about the NFT market. But I think if you were doing a weighted average test and this is just my surmise, it's 80% about Donald Trump, 20% about the market. Got it. Ok. What's your take on the market now that you mentioned it, by the way? I mean, you're not, I mean, you're obviously a very intelligent guy, you know, he had people stepping into the marketplace to buy those nfts for him. Right. I mean, it's sort of a pre sale thing. It's like they do with these stupid political books. Yeah. But somehow we done this, you know, don't add that information because it's difficult to kind of fact check that and prove that as, you know. Uh, but that's why I'm not a journalist. I'm just offering my opinion. We appreciate you about it. I'm offering my opinion. Ok. So just tell us finally, uh your take on Bitcoin on, on generally the markets, the crypto markets, given what's, what's happening in the regulatory space right now. Where do you see it going? So, so the, so the regulators bizarrely are helping Bitcoin right now. Uh because what's, what's happening is uh the crisis of confidence in what's going on in the regulating space, the Federal Reserve. The Congress people are saying, well, wait a minute, I need to probably own more Bitcoin. And so we have a bunch of drunk drivers right now. We're drunk driving the Federal Reserve, we're drunk driving the budget deficit situation and the debt cap in terms of where we're going with that in terms of raising the debt ceiling. And I think people are starting to realize, wait a minute, we've got to get the keys away from these people and perhaps put it into a decentralized format where we can have more predictability and less of this general effect that's happening from these policy makers. We have transitory inflation. We're going to dump 40% more us dollars into the market place. Oh, wait a minute, we don't have inflation. We're gonna raise interest rates 500 basis points in 21 months and crush the market. Uh but wait a minute, we just did that and now it's crushed the regional banking system and so now we have to figure out a way to bail out the regional banking system. Come on guys. Come on. Ok, he's gonna be taking a step back. Let's look at the macro environment and come with long term plan for the American people. That's common sense based. Ok. Uh Anthony Scaramucci, uh guys uh give it up for him, uh Sky Capital founder and managing.

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