Inside the FTX Crypto Scandal: O’Leary’s Million-Dollar Gig
Kevin O'Leary, the well-known investor and "Shark Tank" TV personality, reportedly received a substantial $1 million per hour for promoting the now-defunct cryptocurrency exchange, FTX.
According to Coffeezila, an investigator in blockchain, O’Leary earned $15.7 million for various promotional services to boost the Sam Bankman-Fried exchange, which eventually collapsed in November 2022.
O’Leary served as a paid spokesperson for FTX during Q4 2022, although the exact start date of his involvement is unclear. By November 2022, FTX had collapsed, resulting in over $8 billion in customer losses. During this time, Bitcoin (BTC) saw a flash crash to $15,800 before rebounding. O’Leary invested $10 million in FTX and actively promoted it through social media.
Despite the exchange’s failure, O’Leary defended his due diligence, calling it a “costly mistake.” Criticism arose over his failure to identify issues with the exchange, with Taylor Swift even questioning the $100 million deal. Legal actions were taken, with Taylor Swift researching potential legal violations.
O’Leary’s potential legal consequences for securities violations are uncertain. Sam Bankman-Fried, the founder of FTX, faced SEC charges for defrauding investors while operating the exchange from the Bahamas.
O’Leary’s substantial payments for promoting FTX coincided with Bankman-Fried’s criminal trial, which began on October 3. The trial, lasting six weeks, involves seven charges, including wire fraud, securities fraud, and money laundering.
Prosecutors alleged that over $8 billion in customer funds were funneled to Alameda, a trading arm linked to FTX, through a code backdoor.
Whether Bankman-Fried will testify remains uncertain, but key witnesses, such as his former girlfriend, Caroline Ellison, and former MIT roommate, Gary Wang, are expected. If found guilty, Bankman-Fried could face up to 100 years in prison.