The crypto winter has provided ample lessons to investors and companies alike. However, as is the case with any learning opportunity, hubris prevails among some. Not everybody will learn a lesson from the collapse of the crypto market, be it through the Terra (LUNA-USD) collapse or the FTX fallout. Investors see prime examples of this reality today. Some are making headlines denouncing Sam Bankman-Fried and the cult of personality that has allowed these market hardships to occur. Others are challenging the other companies responsible for bringing on the crypto winter. But others still are choosing to partner up with those responsible for the crash. They are doing so even after knowing the full scope of their misdeeds.
Anthony Scaramucci, founder of SkyBridge Capital, was fooled just as many thousands of others were. Scaramucci said in a recent interview that he was enthralled by FTX, believing its founder Sam Bankman-Fried to be a new Mark Zuckerberg. While not an uncontroversial figure himself, the tech titan has not gone so far as to mismanage and co-mingle his investors’ funds. In essence, Scaramucci previously held Bankman-Fried in high regard. Now, though, he views the FTX founder as a Bernie Madoff type — a Ponzi schemer.
Scaramucci makes this comparison as his company is attempting to regain control over FTX Ventures’ 30% stake in his company. While the SkyBridge founder works over this speed bump, though, he is moving forward with an investment in former FTX.US president Brett Harrison’s new crypto startup. Harrison, who has drawn lots of scrutiny due to his association with Bankman-Fried, has taken to Twitter over the past weekend to distance himself from the company’s wrongdoing.
FTX Fiasco Is Not Proving to Be a Turning Point For Many Investors
Scaramucci’s comments indicate that some are starting to smarten up when it comes to putting money into crypto. He shows, like others have, that he is looking to hold projects under increasing scrutiny. Harrison, too, says he is reckoning with being considered a contaminant of the FTX fallout and, as such, is changing the way he moves forward with his ventures. However, this isn’t the case industry-wide. For every Scaramucci or Harrison, there are plenty of others willing to invest in demonstrably bad actors’ projects.
Case-in-point: the new venture by Three Arrows Capital founders Su Zhu and Kyle Davies. The company, bankrupted by the Terra collapse in May, has been in the spotlight for months now. Much of this has to do with the full scope of Three Arrows’ fund mismanagement being realized, as well as the unwillingness of Zhu and Davies to cooperate with liquidators.
While Zhu and Davies flee from their bankruptcy responsibilities with Three Arrows, they are speedily launching a new exchange project. Indeed, the pair hope clients will entrust them with their assets once more. And as it turns out, it’s working. The two have already announced a partnership with the co-founders of the crypto-staking platform CoinFlex on the new company. The company is now preparing for a $25 million fundraising round.
So no, not everybody is learning their lesson from the crypto winter. Just as the market has shown time and again, crypto offers up plenty of second chances (or third chances) to entrepreneurs who consciously wronged their clients. This is the nature of an investment sphere with no rules. This week’s stories prove once again that without regulations or substantial scrutiny, this culture will be continually perpetuated.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.