Another institution suspends withdrawals, Tianqiao Capital: No need to worry, redemption will be available immediately after successful financing.

Skybridge Capital founder confirmed in an interview that their funds have temporarily suspended withdrawals until the market conditions allow the fund to recapitalize.

Another CeFi Institution Halts Withdrawals

Bloomberg reported on 7/19, citing sources familiar with the matter, that the founder of SkyBridge Capital, Anthony Scaramucci, confirmed in an online interview with CNBC the next day that their fund, Legion Strategies, has temporarily halted withdrawals.

“Our board made a decision to temporarily suspend until we can raise capital inside the fund and then make sure when people get out they get out orderly,” says @scaramucci. “About 18% of the fund is in what we would call #crypto exposure.” pic.twitter.com/j5AxY871n7

— Squawk Box (@SquawkCNBC) July 19, 2022

Official Explanation

Scaramucci stated that Legion Strategies is an offshore fund based in the Cayman Islands with around $250 million in assets, and it is the first time since its establishment in 1994 that they have suspended redemptions.

He mentioned that this decision was made collectively by the board, and redemptions will resume once the fund is able to raise capital to ensure an orderly exit for all users. He emphasized that the fund does not carry any leverage, so there is no concern about any asset liquidation events.

About 18% of the fund is composed of cryptocurrencies, which have dropped by 30% year-to-date but saw a 5% increase within the month. Users had agreed to allow for such flexibility in operations when they signed the agreement initially, and with some market rebound, Scaramucci believes the situation will only improve.

User Reactions

Scaramucci stated:

Some users, who claimed to be long-term investors before facing short-term losses, are feeling frustrated at the current situation and are considering changing their initial investment strategies. However, there are more genuine long-term investors who remain optimistic about the future.

However, this response seemed to not address the host's question. The CNBC host wanted to ascertain how SkyBridge Capital plans to appease users unable to redeem their funds and what users have expressed to SkyBridge Capital, rather than just their reactions to the market conditions.

In 2017, Scaramucci served as the White House Communications Director for former U.S. President Trump. He later joined SkyBridge Capital as a cryptocurrency advocate and submitted a Bitcoin ETF application last March.