FTX and SkyBridge Capital Cut Deal Amid Crypto Downturn

The venture arm of the cryptocurrency exchange FTX, helmed by the billionaire investor Sam Bankman-Fried, announced on Friday that it had taken a 30 percent stake in SkyBridge Capital, the hedge fund founded by Anthony Scaramucci, for an undisclosed sum. SkyBridge will use $40 million from the proceeds to buy cryptocurrencies to strengthen its long-term balance sheet.

The deal comes during a rough stretch for SkyBridge, whose crypto investments have crashed in value, triggering an investor exodus. A so-called crypto winter has wiped out roughly $2 trillion in market value over the past 10 months. FTX has played the white knight during the downturn, sweeping in to strategically assist ailing businesses and expand its empire while moving into products like stocks and options.

“We look forward to collaborating closely with SkyBridge on its crypto investment activity and also working alongside them on promising non-crypto-related investments,” Mr. Bankman-Fried said in a statement.

The two founders have a few things in common. Mr. Bankman-Fried is an outspoken and increasingly influential crypto executive who frequently visits Washington to talk policy. Mr. Scaramucci, who founded SkyBridge in 2005, is also known for a week-and-a-half stint as former President Donald J. Trump’s communications director in 2017. Mr. Scaramucci said he had started taking crypto seriously when he heard Treasury officials discuss the potential of blockchain and digital currencies that year. He bought the domain SkyBridgeBitcoin.com after the White House fired him.

SkyBridge and FTX’s ties began in April when they put on a conference together in the Bahamas. A native Californian, Mr. Bankman-Fried moved there last year from Hong Kong in search of crypto fortunes and looser rules. At the April event, Mr. Scaramucci and Mr. Bankman-Fried shared a stage and wore matching outfits.

Since 2009, SkyBridge has held a series of conferences called SALT, bringing together asset managers, entrepreneurs and others. FTX now has a multiyear partnership to sponsor those events in North America and Asia. The firms said they would also expand their collaboration on venture and digital asset investing.

Source: https://www.nytimes.com/2022/08/31/business/crypto-ftx-skybridge-captial-deal.html