Shark Tank's Kevin O'Leary discusses crypto investing and his partnership with FTX
We want to take a look at bitcoin because bitcoin under a bit of pressure today, still holding above 47 000 right now, but we want to get over to danny romero whos joined by two special guests: danny thanks. Shawna um in the world of cryptocurrency ftx us the us arm of the worlds biggest crypto exchanges has partnered with shark tank investor kevin oleary as an official ambassador and joining us with more on this partnership is kevin oleary himself and brett harrison president of ftxus thanks. So much guys for joining us. Thank you. Thanks for having us and kevin lets, lets uh start with your deal with ftx. What was your thought process there and why ftx us, and does it solve your compliance problems? Yes, it does. I dont endorse products or services that i dont actually use. I eat my own cooking. I think thats important um. I have been trying to solve this compliance issue with my own internal compliance department, my external auditors and, of course, the regulators for quite some time now. The the truth about crypto and the opportunity as well is that it it really hasnt yet been adopted by large institutions the way people think and the number one reason for that is not lack of interest. They want to allocate uh, bitcoin, ethereum, etc and many other tokens coins change whatever, but they dont have the infrastructure to report into their systems. Its that simple, when you buy a stock or a bond, lets, say youre running a billion dollar mandate and you want to allocate ten percent into a portfolio of crypto um thats, a hundred million dollars.
You dont download an app on your phone and do that. You have to have it built into the infrastructures that marks to market by the second, like a stock or bond. Does your compliance department can see your position every second? At the end of the day, reports its your external auditors? They sign off on your statements and it goes off the regulator. There is no infrastructure for that. Yet so ftx is the largest and has the the most invested in building out what i call institutional grade. Compliance so ive been able to do that. Ive been able to structure a situation where i can manage now my own portfolio on an ftx and im, starting to build up from a three percent weighting up to seven percent uh in my operating company by the end of the year and im going to be Using ftx to do it, so i feel very comfortable endorsing this product for what it does provides as a service and how it can help. Someone like me and and thousands of other institutional uh players solve for this compliance problem, its its it boils down. I get the best service, i get access all that, but its compliant, and that is what i have to care about first and was the deal paid in dollars or in crypto and um. I guess what does i know you mentioned a little bit about your portfolio. So what does that really look like now? Well, actually, i didnt want to be paid in dollars.
I want the smartest guys on the trading desk at ftx to tell me what i should own its that simple, because they get to look at a lot of different products from all around the world. I want crypto. I want to have an allocation of around seven percent and i dont want it to be just in bitcoin thats, not diversified enough, so im building a portfolio with them now deciding what i want to hold and ive decided going forward, im going to disclose and be Transparent on the percentage ownerships of what i own and i think, thats very important, because one of the things i get concerned about is, i have millions of followers. I dont want people to think that im buying things and then promoting them im going to disclose what i own and why i own it. Why? I think the merits of each of these positions are, on a monthly basis, im really really interested in d5. I think its disruptive, its going to be much less friction in the costs of all kinds of services. You know just my fx costs of the largest market in the world is currency when i want to buy a swiss stock or european stock in euro or british stock in british pounds. Ive got a trader in front of me clipping me for pip for bips. Every time both ways i detest. Okay, sorry, those words are too strong. I dont like those guys, and i want to get rid of them and im hopeful over time.
They dont they had no value, they had no value and thats just a cape. One use case of what the future holds for for decentralized finance and i think ftx is at the fore of all that and why wouldnt i want to be associated with a player like that. It makes total sense for me i and for me its to be that dialogue with the institutions that i talk to every day about how im tiptoeing into crypto, yeah and brett. On to that point. You know, i know that youre planning on entering you know crypto derivatives and you know expanding your user base. Where is the company on that? Absolutely so, as you may know, recently, ftx us, which is currently a regulated spot cryptocurrency exchange we trade around uh 200 million dollars a day of spot crypto volume on the exchange we recently acquired, ledger x, which is a cftc, regulated, uh derivatives exchange and clearinghouse, which Is going to give us the ability, in collaboration with ledger x and also in collaboration with the cftc, who regulates derivatives in the u.s, the ability to offer crypto futures, crypto options and other kinds of futures and options to our customer base and were really excited about This because, of course, crypto is immensely popular, but not many people know that more than half of all crypto related volume globally trades in derivative products like futures and what we want to do is bring that volume onshore onto the us within the regulatory envelope of the Cftc in a way thats available, easily and safely reliably and in a compliant fashion, to institutions and to retail customers.
And to that point i mean: are you concerned of any of these regulatory crackdowns, especially that have occurred with defy you know at ftx us we have found um through our many different conversations with regulators, the sec, the cfdc, that their door is open and they want Us to walk in through the front door and talk with them about what were doing how we can work with them to be compliant with the regulations that they want to create and have already created, in many circumstances, to bring these products again in a safe, reliable Way to consumers in the u.s and through those conversations we found, actually they are quite open minded. I think that theres this misconception, that the regulatory agencies in washington just want to clamp down on all innovation in crypto and its just not true what they want. People to do is to work with them openly and collaboratively to make this happen, so at ftx were were not concerned were very excited about these ongoing discussions that were having with um with the sec and with the cftc and kevin. You know what is your thought process in terms of the infrastructure bill, um the taxation, the regulatory debate thats going on? What do you see happening? Im im, actually very pleased that the regulator is getting far more involved. Weve obviously had a bad press in the last couple of weeks regarding their role uh with with some of the players in the industry, but the truth is in innovation is, is being created through decentralized finance.
They know that the u.s should lead that they should pioneer it. They should lead it, they should invest in it, thats not lost on the regulator. The best analogy ive ive used for this is i love to watch sunday football. I watch every game. I go into my man cave and i watch it. Those players cant play unless they know the rules. They have to know the rules theres. So many people that want to play but dont know the rules yet and its the job of the regulator to provide those rules and the role and the rule book and theyre going to do that. And so i im very very pleased with the innovation thats been coming. I i know were going to get it right, the amount of buying you got to look at it from the upside. If all of a sudden the rule book had was published and the regulator made, the rules up from nft through to derivatives to futures, to coins, to you know to chains and all that stuff was was settled, then all of a sudden, you would have trillions of Dollars of buying coming into this market, and that would be great for every participant and great for competition and great for services, and maybe i can get rid of those fx traders while were at it. So you know the way i look at it is. This is all good and just because theres friction a little volatility and some positioning its not true that the industry wants to go to war with the regulator.
Its far from that its like brett, said, everybody wants to talk to them and find out what the rule book is. So we can play ball totally agree. This is such a sign that this debate is happening in in washington right now. Its definitely shown us that they, the the senators on the floor, they want to be educated about this. They want to craft legislation that helps encourage innovation in the space and responsibility. You know we believe that you know crypto exchanges like ftx us should be able to report taxes uh to the government and thats to the irs and thats totally reasonable and normal. We want to make sure that we craft this legislation such that it encourages innovation, uh for players in the crypto space um and in the d5 world. Well, such a great conversation.