Skybridge has frozen the cash of cryptocurrency investors, while its CEO Anthony Scaramucci claims the suspension is only a temporary step and there is no risk of insolvency.
Skybridge Capital has halted withdrawals from its Legion Strategies fund, one of the firm’s funds with crypto exposure. In an interview with CNBC on July 19, the company’s founder Anthony Scaramucci announced the change, which Bloomberg had reported the day before citing unnamed sources.
“Our board made the decision to temporarily suspend until we can raise capital inside the fund,” Scaramucci told CNBC. “The fund is unlevered, so there’s definitely no fear of any liquidation whatsoever and about 18% of the fund is in what we would call crypto exposure.” An independent board also took part in the decision, Scaramucci said.
Scaramucci cited FTX shares and Bitcoin (BTC) as two instances of the fund’s exposure to cryptocurrencies. Kraken, NYDIG, Helium, Lightning, and Genesis Digital Assets are just a few of the cryptocurrency-related businesses that are featured as investments on the Skybridge website but are not expressly connected to Legion Strategies. According to Scaramucci, the Legion Strategies fund is down 30% year to date but up 5% in July.
According to Scaramucci, the Cayman Islands-based offshore fund Legion Strategies has around $250 million in assets. It is one of the organization’s minor funds. Since the fund’s establishment in 1994, it had never been suspended prior to this. Skybridge was established in 2005.
Scaramucci stated to CNBC:
“Everybody signed an investor agreement, this type of flexibility, so I don’t think there are any surprises here given what’s going on in the overall market.”
The United States Securities and Exchange Commission has rejected applications from a number of financial services businesses, including Skybridge, to establish a Bitcoin exchange-traded fund (SEC).
In April, Skybridge revealed that it was reinventing itself to “ultimately be a top cryptocurrency asset manager and adviser.” Skybridge made its initial Bitcoin investments in late 2020.
