Cryptocurrency billionaire Sam Bankman-Fried said that he and his company, FTX exchange, still have a “few billion” dollars on hand to help support ailing crypto firms.
Recently, several digital assets platforms have received lifelines from Bankman-Fried and his companies, while others have folded amid the current market downturn.
“We’re starting to get a few more companies reaching out to us,” Bankman-Fried said. Usually these companies have not been in entirely dire situations, and are especially lacking in liquidity but not in assets.
Bankman-Fried and his companies have been performing these bailouts in order to protect customer assets and prevent a further destabilization of the digital asset industry by stopping the contagion from spreading.
“Having trust with consumers that things will work as advertised is incredibly important and if broken is incredibly hard to get back,” he said. However, he believes that the worst of the liquidity crisis has likely passed, adding that the industry has moved beyond “other big shoes that have to drop.”
Bankman-Fried throws lifeline
Since debuting its $2 billion venture capital fund focused on digital asset investments, FTX Ventures in Jan, the company has drawn on it to help support the ailing firms. “It does get increasingly expensive with each one of these,” Bankman-Fried said, adding that the firm still had enough cash on hand for a $2 billion deal if necessary. “If all that mattered was one single event, we could get above a couple billion,” he said.
Last month, crypto lender Voyager Digital had been facing losses from exposure to the collapse of hedge fund Three Arrows Capital. Although it received a $200 million cash and stablecoin revolving credit facility from Bankman-Fried’s crypto trading firm Alameda Research, Voyager filed for bankruptcy last week.
U.S. crypto lender BlockFi also received a $250 million revolving credit facility from FTX in June, and last week gave FTX the right to purchase it based on certain performance triggers.
On occasion, Bankman-Fried has also used his own cash if it didn’t make sense for FTX to do so. “FTX has shareholders, and we have a duty to do reasonable things by them, and I certainly feel more comfortable incinerating my own money,” he said. In May, he personally took a 7.6% stake in Robinhood Markets.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.