In a recent interview, Sam Bankman-Fried, the founder of the popular exchange FTX, warned that some crypto exchanges are “secretly insolvent” and may soon fail. Bankman-Fried’s FTX and Alameda Research have already helped Blockfi and Voyager Digital as the 30-year-old billionaire says sometimes you have to do “what it takes to sort of stabilize things and protect customers.”
Bankman-Fried’s FTX and Alameda Research Provide Credit Lines to Specific Crypto Firms
די קריפּטאָ עקאנאמיע has been hit hard by the current bear market and Terra LUNA and UST fallout that took place last month. Terra’s downfall arguably started a significant domino effect that saw numerous exposed firms suffer sizable losses.
Many of the issues hurting the crypto community stem from massive leverage and most of the contagion effect is tethered to lenders and borrowers. Over two weeks ago, the crypto lender Celsius paused withdrawals, און 'people familiar with the matter’ have האט Celsius is dealing with notable financial hardships.
Three Arrows Capital (3AC), a crypto hedge fund based out of Singapore, allegedly fell victim to crucial liquidations און געקויפט $200 million of locked luna classic (LUNC) that’s now worth $700. The issues that derived from Terra, Celsius, and 3AC have seemingly trickled exposure down to other crypto firms as well.
Bankman-Fried’s quantitative cryptocurrency trading firm, Alameda Research, helped Voyager Digital cope with 3AC exposure by פּראַוויידינג the firm with a $500 million line of credit. His crypto exchange FTX געגעבן the crypto lender Blockfi a $250 million line of credit on June 21.
Bankman-Fried: ‘Some Companies Are Too Far Gone’ or ‘There’s Not Much of a Business Left to Be Saved’
Furthermore, Bankman-Fried שפּיזל about 3AC on June 19, and explained on Twitter that 3AC’s financial hardships “couldn’t have happened with an onchain protocol that was transparent.” On June 28, 2022, Forbes author סטיווען עהרליך did an interview with Bankman-Fried, and the FTX CEO was very candid about crypto exchanges that are “secretly insolvent.”
Bankman-Fried also spoke about the recent investments in Blockfi and Voyager, as the FTX CEO explained there’s a chance he may not get a return on his investment. “You know, we’re willing to do a somewhat bad deal here, if that’s what it takes to sort of stabilize things and protect customers,” Bankman-Fried told the Forbes contributor. The FTX CEO said that more platforms will bow out from financial burdens in the near future.
“There are some third-tier exchanges that are already secretly insolvent,” Bankman-Fried detailed. “There are companies that are basically too far gone and it’s not practical to backstop them for reasons like a substantial hole in the balance sheet, regulatory issues, or that there is not much of a business left to be saved,” he added.
On May 27, 2022, Bankman Fried said that FTX was צוגעגרייט to deploy billions on mergers and acquisitions. Bankman-Fried told Forbes that FTX is financially sound and has been profitable for 10 quarters.
He told Ehrlich that FTX was eyeing over-leveraged crypto miners. Bitcoin.com News has also recently געמאלדן that estimates say there’s currently $4 billion in distressed loans backed by crypto mining rigs. Bankman-Fried talked to Ehrlich about the largest stablecoin by market valuation, tether (USDT), as well. According to Ehrlich’s interview with Bankman-Fried, the FTX CEO is not concerned about tether.
“I think that the really bearish views on Tether are wrong… I don’t think there is any evidence to support them,” Bankman-Fried told the reporter.
What do you think about Bankman-Fried’s recent interview regarding the distressed crypto companies? Let us know what you think about this subject in the comments section below.
בילד קרעדיץ: שוטטערסטאָקק, פּיקסאַבייַ, Wiki Commons
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Source: https://news.bitcoin.com/ftx-ceo-sam-bankman-fried-warns-more-crypto-company-insolvencies-are-coming/