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Amid Crypto Downturn, Two Big Names Cut Deal

The venture arm of cryptocurrency exchange FTX, aided by billionaire investor Sam Bankman-Fried, announced Friday that it had taken a 30 percent stake in SkyBridge Capital, the hedge fund founded by Anthony Scaramucci, for an undisclosed amount. SkyBridge will use $40 million of the proceeds to buy cryptocurrencies to bolster its balance sheet in the long run.

The deal comes during a difficult period for SkyBridge, whose crypto investments have crashed in value, triggering an exodus of investors. A so-called crypto winter has swept away approximately $2 trillion in market value over the past 10 months. FTX played the white knight during the downturn and invaded assist strategically distressed companies and expand his empire while switching to products such as stocks and options.

“We look forward to working closely with SkyBridge in its crypto investment business and also working with them on promising non-crypto related investments,” Bankman-Fried said in a statement.

The two founders have a number of things in common. Mr. Bankman-Fried is an outspoken and increasingly influential crypto executive who regularly visits Washington to discuss policy. Scaramucci, who founded SkyBridge in 2005, is also known for a week and a half as communications director for former President Donald J. Trump in 2017. Scaramucci said he started taking crypto seriously when he heard treasury officials discuss the potential of blockchain and digital currencies that year. He bought the domain SkyBridgeBitcoin.com after the White House fired him.

The ties between SkyBridge and FTX started in April when they held a conference together in the Bahamas. A California native, Mr Bankman-Fried moved there from Hong Kong last year in search of crypto fortunes and looser rules. At the April event, Mr. Scaramucci and Mr. Bankman-Fried shared a stage and wore matching outfits.

Since 2009, SkyBridge has held a series of conferences called SALT, bringing together asset managers, entrepreneurs and others. FTX now has a multi-year partnership to sponsor these events in North America and Asia. The companies said they would also expand their partnership in venture capital and digital asset investments.