Flashback: Bill Clinton hung with Bankman-Fried on $3K Bahamas shindig, called for ‘do no harm’ regulations

Months before FTX founder and cryptocurrency mogul Sam Bankman-Fried lost his $15.6 billion fortune and his company, he was befriending Bill Clinton at a posh cryptocurrency conference in the Bahamas.

Clinton was a paid speaker at the April 2022 Crypto Bahamas event hosted by now-bankrupt cryptocurrency exchange FTX, where Democratic mega-donor Bankman-Fried moderated a panel with former British president and former Prime Minister Tony Blair. Clinton’s comments were unofficial, but a recording of him advocating a “do no harm” approach to cryptocurrency regulation has been leaked, according to industry outlet Trust Nodes.

Clinton also said there was a “temptation to abuse” digital currencies, but she praised the emerging technology as “obviously serious” in her remarks, Politico reported in April.

“You want to do the right thing in the regulatory space,” he said, referring to his administration’s efforts to deregulate financial markets in the 1990s.

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Former President Bill Clinton speaks at Temple Emanu-El on November 10, 2022 in New York City. (Michael Kovac/Getty Images/Getty Images)

Sam Bankman-Fried sits down for Bloomberg interview

Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, during an interview on an episode of Bloomberg Wealth with David Rubenstein in New York, August 17, 2022. (Jeenah Moon/Bloomberg via Getty Images/Getty Images)

The April conference was an expensive and exclusive party for the who’s who of major cryptocurrency investors, celebrities and world leaders. Katy Perry and Orlando Bloom were in attendance, as were NFL GOAT Tom Brady and then-wife Giselle Bundchen, while DJ Steve Aoki and former One Direction singer Liam Payne provided entertainment for conference attendees, who paid more than $3,000 for their tickets.

FTX hosted the event in partnership with thought leadership forum SALT, founded by Anthony Scaramucci, who was briefly White House communications director for former President Donald Trump.

It was a celebration of the huge wealth potential that makes cryptocurrency so alluring. But now, seven months later, the inherent risks of a poorly regulated market are evident. FTX’s staggering fall from the world’s third largest cryptocurrency exchange to bankruptcy in the span of a week has left investors stunned, customers on the run, and lawmakers demanding new regulations on the cryptocurrency industry.

“I screwed up and should have done better,” Bankman-Fried tweeted on Thursday, crassly pointing out how his mismanagement has left FTX with an $8 billion hole in its budget.

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Sam Bankman-Fried

Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, speaks during the annual meeting of members of the Institute of International Finance in Washington, DC, Oct. 13, 2022. (Ting Shen/Bloomberg via Getty Images/Getty Images)

After Bankman-Fried resigned in disgrace, his successor John Ray III – the lawyer who previously oversaw the $23 billion bankruptcy of energy company Enron – accused the former CEO of allowing “a complete failure of corporate controls”.

“Never in my career have I seen such a complete failure of corporate controls and such a total absence of reliable financial information as here,” Ray said in a deposit with the United States Bankruptcy Court for the District of Delaware. “From compromised systems integrity and faulty regulatory oversight overseas, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”

FTX lawyers said Thursday that Bankman-Fried’s “unconventional leadership style,” “his incessant and disruptive tweets,” and “near lack of reliable corporate records” complicated efforts to restructure the firm. In court filings, they accused the cryptocurrency mogul of trying to move assets out of the US and into the Bahamas, where they would be under the control of the Bahamian government, in an apparent attempt to circumvent US regulators.

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FTX logo

In this photo illustration, the FTX Token (FTT) stock trading chart seen on a smartphone screen. (Photo by Rafael Henrique / SOPA Images/Sipa USA)No use Germany. (Rafael Henrique / SOPA Images/Sipa USA / Reuters Photos)

Adding to the intrigue is the fact that Bankman-Fried, who has donated about $38 million to leftist and Democratic causes over the past two years, has been lobbying for regulations that would have been favorable to FTX.

“I’m optimistic that over the next year or so, we’re going to see some really substantial leaps forward in the global regulatory environment and the US regulatory environment for cryptocurrencies. You know, it’s been a pretty tough back-and-forth fight, I think, for a while. And I think [the] the industry is as much to blame as anyone in terms of the relationships that have developed between, you know, industry and regulators,” Bankman-Fried told FOX Business Network a decade before his downfall.

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“But I think there is light at the end of the tunnel there. And I think there are some straightforward policy proposals that could fix what regulators want, while also allowing cryptocurrencies to grow really big as an asset class by moving liquidity and volume to the ground.” , he added.

US lawmakers have called the FTX crisis a “debacle,” and the House of Representatives will hold hearings in December to probe the FTX collapse and “the broader consequences for the digital asset ecosystem.”

Megan Henney of FOX Business contributed to this report.

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