SkyBridge’s Anthony Scaramucci on Donald Trump, Gary Gensler and Bad Press

“In this episode of CoinDesk’s Spotlight Series, I’m excited to welcome our distinguished guest, Anthony Scaramucci. He made a significant mark in the White House as communications director and now leads SkyBridge Capital. Please join me as we delve into his insights and experiences.”

Jennifer Sanasie: it’s a pleasure to be reunited with you once more. I must inquire, does the label of “former White House Communications Director” sit uneasily with you now, given your tenure lasted just eleven days?

Anthony Scaramucci: Jen, I’ve faced much harsher criticisms throughout my life. Isn’t that amusing? I take it in stride. These experiences are part of who I am. I acknowledge past mistakes and strive to improve daily. That incident occurred seven years ago, amazingly enough. The president terminated my employment due to certain missteps within the White House. He had the authority to do so. We’ve all learned a valuable lesson from this experience.

Don’t hang on things and if that’s part of my legacy, so be it.

Jennifer Sanasie: In modern times, marked by social media, there’s a widespread apprehension among people I interact with. They are keen to avoid being shamed publicly or making mistakes that might stick to their reputation permanently. Your book frequently touches upon this issue, and it is intriguing. Given your experiences of navigating such events successfully, have you ever encountered residual anxiety or feelings akin to trauma from these highly public incidents? If so, how have you coped with them? This represents a significant challenge.

Anthony Scaramucci shares an experience from his past when he endured intense public scrutiny and offers advice on how to handle negative attention. He suggests two mindsets: either adopt a victim mentality or laugh about it and move forward. Scaramucci recalls his grandmother’s wisdom, “What other people think of you is none of your business,” which he applies to social media and negative articles. He acknowledges that for successful businesses like SkyBridge, there are fewer positive articles written about them but encourages ignoring the negativity and focusing on productivity. Scaramucci warns that excessive focus on social media comments can contribute to societal stress, urging individuals to disregard such comments as irrelevant.

Jennifer Sanasie: I find that advice really useful. Reading the comments can have negative effects on me, so I need to stop doing that.

When I started working at the White House, Anthony Scaramucci shared an experience. On his initial day, he held a press conference on the second floor of the West Wing. Kellyanne Conway then took his phone and turned off all notifications. She advised him to focus solely on his job, which he did. Ever since that day seven years ago, Scaramucci has kept his phone notifications disabled.

Jennifer Sanasie: I find your intelligence impressive. I believe I will adopt that approach we discussed earlier. Let me clarify, our last conversation took place shortly after the FTX controversy, an event that generated significant media attention and impacted you greatly. You were closely associated with Sam Bankman-Fried, and there were business transactions between you two that were publicly disclosed. Reflecting on this experience in light of the industry’s developments since then, what lessons have you taken away? How have you integrated these learnings into your current role at SkyBridge and your focus on crypto?

Anthony Scaramucci reflects on his experience with crypto investments and shares valuable lessons learned:

Jennifer Sanasie: You gotta tell Mark to come on and share that with me.

Anthony Scaramucci: I’ll discuss why the rejection of the bitcoin ETF by him was essentially against the law due to the requirement of not being arbitrary and capricious. The futures ETF had already been authorized, making it illogical for arbitrariness in administering the law. Consequently, the cash ETF should have followed shortly. However, there was a delay of approximately 12 months. This delay led to the exposure of industry fraud and overleveraging, ultimately resulting in a stronger and more stable industry. Prices for bitcoin have also become less volatile as a result. Three key takeaways: first, address negative situations promptly by communicating openly; second, maintain integrity throughout your actions; third, remain committed to what you believe in if it proves successful. SkyBridge Capital has experienced significant financial gains from our involvement in this field.

Jennifer Sanasie: I’d like to revert to our political discussion momentarily. However, regarding FTX, may I inquire if you still keep in touch with Sam or his relatives?

Anthony Scaramucci: It’s been a while. I haven’t talked to Sam. I know that my friend Bill Cohen went to go visit him in prison. I think it’d be tough for me to do that because of the fraud that was perpetrated against me and my clients. I do feel bad for Sam. I have a, I know this, shouldn’t be saying this, maybe because I got raised Catholic. I have a soft spot for Sam. While I’m sore at him for what happened, I have forgiven him and I’ve moved on. And I a politician at some point in the future commutes that sentence. I don’t want to see him be in jail for 25 years. People will more or less get their money back. He’s got some issues, mental health-related issues. And I hope, I hope, that there’s, you know, some level of rehabilitation for Sam in the.

Jennifer Sanasie: I think there are people who had a really bad experience, I guess you could say during the FTX’s debacle, people are likely going to get paid back, like you said, now. But I think that there are people who went through that experience and feel like, you know, Sam was sentenced, it was a fair sentence, he shouldn’t get out. What would you say to those people?

Anthony Scaramucci acknowledges the perspective of those with whom he disagrees and values the intrigue and importance of democratic debates. He concedes their arguments may hold merit, and if that’s the outcome, he would abide by it. In his life experiences, he has learned the power of forgiveness and pardoning others as a personal benefit. This is reminiscent of the Pope’s act of forgiving his assailant following an assassination attempt in 1981. As someone raised Catholic, Scaramucci reflects on these teachings and considers the merits of opposing viewpoints. If he lost the debate, he would respect their stance.

As a researcher, I’m intrigued by your latest discovery regarding Donald Trump’s upcoming speech at a Bitcoin conference. Given our previous conversation about his involvement in cryptocurrencies and his reputation as a former president, I’d like to delve deeper into your perspective on this matter.

Anthony Scaramucci: Well, I believe it makes little difference whether Trump is being opportunistic or transactional. His entire career demonstrates this. I think it’s been detrimental for the Democrats to let figures like Elizabeth Warren and Gary Gensler handle crypto regulation. The outcome has been disastrous for them. Trump’s election could still be lost by Biden, despite his decent record in areas such as manufacturing and infrastructure. However, if Biden can’t construct coherent sentences during debates or speak freely without a teleprompter, it raises concerns. He seems to be asking people to disregard their perceptions of his abilities and instead trust that he is fully competent. I feel sympathy for him, but my advice would be for him to consider stepping aside for newer Democratic leaders. This decision becomes increasingly difficult with only 120 days remaining until the election.

Jennifer Sanasie: I’m curious to know your perspective. Does a 62% chance of Trump winning the election imply any significant shift in U.S. policies regarding crypto legislation and regulation if he gets elected? Or would these issues continue to be a point of contention?

Anthony Scaramucci expresses his belief that the Trump administration, if re-elected, will appoint a SEC commissioner who is pro-SEC, pro-crypto, and pro-digital assets. This individual will likely put an end to debates about securities and tokens, as the markets will be crypto-friendly under this administration. Scaramucci warns that if the Democrats continue their regulatory approach, the industry may grow despite them and the U.S. could lose intellectual and capital investment. He emphasizes that there are bad actors in every industry, but a collaborative effort to regulate appropriately would be more beneficial for everyone. If regulations don’t change, voters who own crypto may feel strongly enough about the issue to elect candidates like President Trump.

Jennifer Sanasie: Do you think that Biden should be the Democratic candidate?

Anthony Scaramucci has consistently expressed his viewpoint that President Trump should not be in office any longer. I personally believe this to be the case based on the current situation. It would be ideal if a younger, more energetic candidate were chosen instead. However, if they opt against this, I will support President Biden and do my part to help him secure another term. My concern is that I view Trump as a potential threat. If Trump manages to win the election, then so be it. As an American, I cherish my country and recognize that dissenting opinions contribute positively to our nation.

In the event that Joe Biden isn’t the Democratic Party’s nominee, and another individual takes his place as the candidate, what could be the potential implications for cryptocurrencies according to your perspective?

Anthony Scaramucci: I have a positive outlook. It would be beneficial to remove Elizabeth Warren and Gary Gensler from their current positions. This change could provide an opportunity for a fresh start. President Biden has many advisors in the White House shaping policy, but a newcomer could step in and suggest, “let’s try something different. I don’t know those people, let’s begin anew.”

Jennifer Sanasie: Have you been following the Polifi tokens at all?

Anthony Scaramucci: I haven’t, no, not that familiar.

Jennifer Sanasie: Meme coins represent informal wagers on Trump and Biden. It’s quite amusing, really. Have you been keeping up with this trend?

Anthony Scaramucci hasn’t kept up with that trend. Maybe I’m growing older. I’m not inclined towards it.

Jennifer Sanasie: Yes, it’s unnecessary. It seems a tad absurd. However, I understand that you’re quite confident in your prediction that Bitcoin will reach $100,000 by the end of the year. So, what conditions do you believe must be met for this to occur?

Anthony Scaramucci: I believe we need to address the Mt. Gox predicament first. Apologies for the mistake in my previous statement, as I intended to discuss FTX next due to their connection. Once we resolve Mt. Gox and I acquire some of the resulting bitcoins, which I won’t sell, the financial market will also process the FTX situation. This involves approximately $16 billion in cash.

Jennifer Sanasie: We’re not through it yet. OK.

Anthony Scaramucci: The bankruptcy estate is set to release approximately $16 billion into the accounts of FTX users. Some account holders may feel shortchanged since the value of their bitcoins or tokens has increased. However, a significant portion of this cash could flow back into cryptocurrencies, potentially reaching $5-$10 billion. This influx could generate additional buying pressure in the marketplace. Moreover, I anticipate that model portfolios will allocate around 1-4% to bitcoin over the next few years due to its decreasing supply, which is likely to boost prices.

Jennifer Sanasie: Before we wrap up, Anthony, I have a question regarding an article published in Bloomberg today. The article mentions that you prevented clients from withdrawing funds from SkyBridge Capital’s crypto-hedge fund. Could you please provide some insight into this situation?

Anthony Scaramucci: I didn’t read the recent article by Kathy Burton, but I recall her writing my financial obituary last May, predicting our demise and poor performance. While there was some truth to it, our recent performance has been strong, though I can’t disclose specific numbers. Regarding her allegation of blocking redemptions, it’s not accurate. Our prospectus allows us to control redemptions every six months, which wirehouses requested due to the presence of private capital in our fund. Protecting the integrity of the portfolio is crucial for us as fiduciaries. If clients are dissatisfied with the current redemption process, they can still exit, but it may take longer than expected. This approach ensures fairness to all investors and safeguards the health of the portfolio. Despite her criticisms, I encourage listeners to carefully review our prospectus before investing, as we remain committed to delivering strong performance for our clients. Additionally, despite some complaints, we are currently raising funds from new investors.

Jennifer Sanasie: Inquiring further, could you elaborate on some of the key reasons behind the restriction of redemption in 2022? Has the situation evolved since then? I aim to grasp a clear understanding before forming an opinion regarding the article’s content.

As a researcher studying the hedge fund industry, I can tell you that one of the challenges faced by funds with wirehouse distribution is the potential for abrupt termination of these relationships. In such cases, the wirehouses may demand that all their clients redeem their investments from the affected fund immediately. This sudden withdrawal of support can be detrimental to the fund, particularly when it occurs during a market downturn. Consequently, many industry professionals caution against relying excessively on wirehouse distribution due to its unpredictable nature. While some investors may choose to leave, others might prefer to remain in the fund, creating pressure on the fund manager to facilitate redemptions while also demonstrating the continued performance of their portfolio. Ultimately, the situation presents a complex challenge for fund managers, requiring them to balance their fiduciary responsibilities with the needs and expectations of their clients.

Jennifer Sanasie: One thing we’ve discovered about you, Anthony, is that you’re not afraid of being in the spotlight.

Anthony Scaramucci: Sure thing. I’ll pass on your greetings to Kathy. If we had an unresolved issue from our high school days, please convey my apologies for any past hurt feelings. It wasn’t my intention at the time.

As your analysis concludes, Anthony, I want to express my gratitude for being part of today’s Coin Desk Spotlight discussion. I’m looking forward to our next conversation.

Anthony Scaramucci: Great to be on with you. Have a great weekend.