Kevin O'Leary Was About To Throw A Lifeline To FTX: Report

Kevin O'Leary, aka Mr. Wonderful, was about to bail out the now-disgraced crypto exchange FTX, but did not do so due to SEC Chair Gary Gensler's remarks.

The venture capitalist was present on CoinDesk TV's "First Mover" Monday and revealed that FTX was attempting to solve its liquidity issues. Sam Bankman-Fried approached O'Leary a day before his exchange filed for bankruptcy.

Several sovereign wealth funds and pension funds contacted him with requests to help FTX fill the $8 billion hole in its balance sheet, due to which Binance decided not to acquire the embattled exchange, the "Shark Tank" star notes.

"That's the kind of money that an institution or a sovereign wealth fund can put to work if they thought there was an interesting opportunity," O'Leary said. "In financial services, liquidity events like this can be interesting investment opportunities if you think it's a legitimate investment and it's not an issue with the regulator."

While O'Leary was moving towards helping FTX, SEC Chair Gensler said that the crypto sector is "significantly non-compliant" and requires more regulation.

"The minute that occurred, that was the end of any sovereign wealth fund's interest," O'Leary said. "There was no way to get that $8 billion onto the balance sheet of FTX with regulators hovering overhead."

O'Leary was a paid spokesperson and ambassador for FTX, receiving crypto as well as stocks for his services, per an August 2021 statement.

"It [FTX] has some of the best crypto exchange offerings I've seen on the market. FTX leverages best-in-class tech to provide a quality trading experience with low fees for both professional and retail investors alike, while at the same time providing the reporting platform that serves both internal and regulatory compliance requirements," said O'Leary in August 2021.

However, the beleaguered exchange has clearly violated its own 'terms of service,' by lending customer funds to sister firm Alameda. User assets worth billions of dollars were used to fund risky bets. Bankman-Fried is probably criminally liable for allegedly embezzling customers' funds.