Last Friday, FTX Ventures acquired a 30% stake in SkyBridge Capital, the $2.5 billion alternative asset manager from Anthony Scaramucci. The partnership was announced on the eve of SALT New York, a leading finance, technology and macro forum for the world of alternative investing. Monday’s programming laid the groundwork for SkyBridge’s vision of the future of a crypto-powered financial world. Touching on everything from the relevance of FTX investment, the need for regularity clarity, and the strengths of each field, the show reaffirmed the idea that TradFi and DeFi players will need each other for (crypto) digital assets to thrive. .
SkyBridge Capital and SALT
Starting his financial career at Goldman Sachs and Lehman Brothers, Scaramucci founded Oscar Capital Partners in 1996. After selling the company to Neuberger Berman in 2001, he launched SkyBridge Capital in January 2005. Like most funds, SkyBridge was not immune to the ravages of the Global Financial Crisis, posting what would be its worst year ever, falling 19 percent in 2008. With the industry in crisis, Scaramucci took a contrary “go big or go home” approach and launched the first SALT conference in Las Vegas in March 2009. Framed as a public policy event, the show has featured heads of state, top military leaders, big-name investors, athletes, actors, and entrepreneurs who shape business and finance around the world. .
If past years are any indicator, Day 1 in SALT pointed to a global financial system that will rely heavily on cryptocurrencies and their underlying distributed ledger technology. While the world’s imagination was captured by the meteoric rise of the asset class, the crypto winter of 2022 has provided an opportunity for financial institutions to further investigate the technology and their approaches to adapting it. However, like any new technology and asset class, there are challenges. The lack of institutional operational knowledge and the limitations of legacy technology platforms are just the tip of the iceberg. While financial technologists are creating solutions that alleviate these concerns, regulatory challenges complicate uptake as institutions grapple with issues not found with traditional financial assets and systems. Finally, the cultural differences between financiers and “degens” create a less quantifiable layer of friction that has held back the adoption of digital assets by business users.
The FTX investment
Sam Bankman-Fried (SBF) has been heralded as perhaps the most influential person in the world of cryptocurrencies and Web3. His platform, FTX, has led the crypto dialogue around the world and pushed for common sense regulatory reform that would bring clarity to crypto investors and businesses. In addition to lobbying, the company has aggressively invested in cryptocurrencies.
companies, even more so in the middle of the crypto winter. Simultaneously heralded and vilified for offering bailouts to crypto lenders such as Voyager Digital and BlockFi, Bankman-Fried has acknowledged that the investments could be very risky, but has stated that being a “good and constructive player in this space” warrants “burning a small amount of money.”
The SkyBridge-SBF connection was made when Scaramucci contacted Bankman-Fried while the former was on a Disney family cruise in the Bahamas. The pair struck up an unlikely alliance over lunch that subsequently led to the inaugural Crypto Bahamas conference in April 2022, within seven months of FTX’s move to the Caribbean island nation from Hong Kong.
FTX Ventures acquired a 30% stake in SkyBridge Capital with the right to purchase up to 85% of the company. The financing package included $40 million to invest in a basket of various cryptocurrencies, which was implemented immediately. For FTX, the partnership opens up a network of global financial relationships at a time when TradFi institutions are planning their digital asset strategies. For SkyBridge, the relationship translates into an elevated look at the rapidly developing crypto ecosystem in which FTX plays a leading role.
While Scaramucci has been characterized in many ways, this latest move can be seen as nothing more than pragmatic. SkyBridge has weathered its share of the market turbulence and has grown with every step. It is important to remember that less than a year after the inaugural SALT conference, SkyBridge purchased Citigroup’s