FTX founder and CEO Sam Bankman-Fried (SBF) is undoubtedly one of the biggest personalities in crypto. The current market slump has left many exchanges and firms in the dirt. However, SBF has been generously helping such failed projects. He recently acquired Liquid, a troubled Japanese exchange, which was a victim of a $100 million hack. Moreover, FTX recently agreed to purchase Canadian exchange Bitvo.
While speaking to Forbes, SBF stated,
“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.”
Three Arrows Capital (3AC), a highly leveraged cryptocurrency trading company with $200 million in exposure to Luna, reported that it was on the verge of bankruptcy earlier this month. Numerous cryptocurrency companies, including New Jersey’s Voyager Digital and New York’s BlockFi, provided Three Arrows with significant loans. The two digital asset exchanges resorted to FTX to stay afloat after Three Arrows went into debt. Together, FTX and SBF’s Alameda quantitative trading company gave the businesses credit lines totaling $750 million.
Are Bankman-Fried’s & FTX’s actions all in goodwill?
SBF is well aware that his own fortune is dependent on the markets staying afloat. Hence it would not be far-fetched to assume that his generosity does come with certain expectations.
SBF has also invested in Robinhood, a crypto brokerage where FTX already holds a 7.6% interest. There were speculations that FTX was considering buying the company. However, SBF denied having any ongoing merger discussions with Robinhood. He informed Forbes that more failed cryptocurrency exchanges are imminent.
He stated,
“There are some third-tier exchanges that are already secretly insolvent.”
Additionally, SBF believes that many companies are beyond saving. He said,
“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.”
Although the recent crash wiped out billions of Dollars, SBF claims that its exchange has been profitable for the previous 10 quarters. Meanwhile, FTX’s major competitor, Coinbase has lost $432 million in Q1 of 2022. Its stock is down by up to 90% from its all-time high.
At press time, FTX (FTT) was trading at $25.46, down by 7.1% in the last 24 hours.