FTX CEO Prepares Billion Dollars To Help Troubled Crypto Companies. The CEO of crypto exchange FTX and crypto billionaire, Sam Bankman-Fried said his company still has “several billion dollars” to shore up companies struggling due to falling crypto prices.
Bankman-Fried, originally from California but living in the Bahamas where FTX is based, has become a hero in the crypto industry in recent weeks. He gives life to a digital asset platform that has faltered as cryptocurrency prices have fallen.
“We’re starting to get a few more companies reaching out to us. “Those companies are generally not in a dire situation, although some of the smaller crypto exchanges may still fail, he said,” Bankman-Fried said.
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Another Bankman-Fried crypto trading firm, Alameda Research, is providing crypto lender Voyager Digital with a USD 200 million revolving credit facility, cash and stablecoins, and bitcoin facilities. The company Voyager Digital is currently facing losses from exposure to the crypto hedge fund Three Arrows Capital.
Also in June, FTX handed US cryptocurrency lender BlockFi a $250 million revolving credit facility and announced a deal that gave FTX the right to buy it based on certain performance triggers.
According to Bankman-Fried, the purpose of a bailout is to protect customer assets and stop contagion from bouncing through the system.
“Having trust with consumers that things will work as advertised is very important and if they break it’s very difficult to return,” explains Bankman-Fried.
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In January, FTX launched FTX Ventures, a $2 billion venture capital fund focused on digital asset investments, which has since been used to help rescue companies that lack liquidity, but not assets.
FTX CEO Prepares Billion Dollars To Help Troubled Crypto Companies. Previously, FTX co-founder and CEO and crypto billionaire, Sam Bankman-Fried was open to the acquisition of a troubled crypto mining company to help stem the contagion in the crypto industry.
“If we think about the mining industry, they played little role in the possible spread of the contagion, to the point that there were miners who pledged loans with their mining rigs,” said Bankman Fried, quoted from Yahoo Finance, Thursday (7/7/2022).
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“There could be a very interesting opportunity for us, I definitely don’t want to ignore that possibility,” he added.
Bankman Fried explained in more detail about this plan in a tweet on Twitter some time ago. Bankman Fried tweeted he didn’t specifically look at the miners, but was happy to have a conversation with any company.
Private and public crypto miners face margin calls and defaults after owed anywhere between USD 2 billion and USD 4 billion to finance the construction of their giant facilities across North America, according to data compiled by CoinDesk and industry participants.
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Previously, FTX just announced last Friday that it had struck a deal with crypto lender BlockFi to provide BlockFi with a USD 400 million credit facility and potentially up to USD 240 million.
Then Alameda Research, which is owned by Bankman-Fried, previously provided a USD 200 million cash and USDC loan and a 15,000 bitcoin (USD 294 million) revolving credit facility to the troubled crypto exchange Voyager Digital.
Because regulations are still gray in the crypto industry, it is difficult for crypto companies to find funds to deal with the recent decline in crypto prices.
Bankman Fried and his company are now considered a savior for major crypto industry players amid the ongoing price pressures. Bankman Fried is also known as a humble person because he prefers to donate most of his wealth rather than keep it for himself.
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Previously, billionaire and founder of crypto exchange FTX Sam Bankman-Fried revealed the so-called crypto winter is not over and a number of cryptocurrency exchanges have run out of cash. This has made several other crypto companies threatened with bankruptcy.
“There are several third-tier exchanges that have quietly gone bankrupt,” Bankman-Fried told Forbes, quoted from CNBC, Sunday, July 2, 2022.
The 30-year-old’s own wealth has seen a significant decline in 2022 as cryptocurrencies have fallen, but are still at USD 8.1 billion or around Rp 121.81 trillion (assuming an exchange rate of Rp 14,961 per US dollar) according to Bloomberg.
Bankman-Fried’s crypto company FTX has now become the last lender to several crypto companies that are on the verge of bankruptcy. Most recently, FTX is close to agreeing to buy crypto lending company BlockFi for around USD 25 million.
However, Bankman-Fried said there are more crypto companies that are likely to go bankrupt.
“There are companies that are fundamentally too distant and impractical to support them for reasons like a big hole in the balance sheet, regulatory issues or not much business left to save,” Bankman-Fried said.
FTX CEO Prepares Billion Dollars To Help Troubled Crypto Companies. Co-billionaire and Dallas Mavericks owner Mark Cuban has previously described crypto’s current decline as similar to the dotcom bubble of the early 2000s, when speculative investments inflated the valuation of internet-based companies over a 5-year span before falling sharply in 2001 and 2002.
“Crypto is going through the lull that the early internet had. The space is currently stuck in an imitation phase where there are too many companies with too few new utilities. Like Bankman-Fried, he expects more companies to fail,” Cuban said.
Meanwhile, Cuban shares the same view as Bankman-Fried in that there will be many crypto companies that are not strong enough to survive.
