Bankman-Fried says FTX has ‘a few billion’ to support the crypto industry

    09 Jul 2022

    Sam Bankman-Fried, head of FTX, one of the largest crypto exchanges, said he and his company still have a “few billion” on hand to shore up struggling firms that could further destabilize the digital asset industry, adding that the worst of the liquidity crunch has likely passed.

    Bankman-Fried, 30, who lives in the Bahamas where FTX is based, has become crypto’s white knight in recent weeks, throwing lifelines to digital asset platforms struggling after cryptocurrency prices have fallen.

    “We’re starting to get a few more companies reaching out to us,” Bankman-Fried told Reuters. Those firms are generally not in dire situations, though some smaller crypto exchanges may still fail, he said, adding that the industry has moved beyond “other big shoes that have to drop.”

    Alameda Research, Bankman-Fried’s crypto-trading firm, gave crypto-lender Voyager Digital a $200 million cash and stablecoin revolving credit facility, and a facility of bitcoin, as the company faced losses from exposure to crypto hedge fund Three Arrows Capital. Last week, Voyager has paused all customer withdrawals, deposits, and trading, and later filed for bankruptcy.

    Recently, FTX handed crypto lender BlockFi a $250 million revolving credit facility and announced a deal giving FTX the right to purchase it based on certain performance triggers.

    Bankman-Fried said the goal of the bailouts was to protect customer assets and stop the domino effect through the crypto sector.

    “Having trust with consumers that things will work as advertised is incredibly important and if broken is incredibly hard to get back,” he added.

    Back in January, FTX revealed FTX Ventures, a $2 billion venture capital fund focused on digital asset investments, which it has since drawn on to help bail out firms that are lacking liquidity, but not assets.

    “It does get increasingly expensive with each one of these,” Bankman-Fried said, adding that the firm still had enough cash on hand to do a $2 billion deal if necessary.

    “If all that mattered was one single event, we could get above a couple billion,” he said, stressing that isn’t his preference.

    In his words, Bankman-Fried had used his own cash instead of FTX to backstop several failing crypto companies.

    “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 noted.

    This year, Forbes ranked Bankman-Fried’s net worth this year at around $24 billion, however later, Bloomberg’s Billionaires Index said May that figure has been cut in half due to the crypto downturn.

    Starting his career in finance at quantitative trading firm Jane Street, then Bankman-Fried founded crypto trading firm Alameda Research and in 2019 set up FTX, which was valued at $32 billion in January 2022.

    Currently, as rival crypto exchanges face layoffs after earlier hiring sprees, FTX has around 300 employees, and Crunchbase pegs Alameda’s staff at about 50, with plans to raise these numbers.

    “Every quarter this year, I expect our workforce to be bigger than the previous quarter, but we’re trying not to grow insanely quickly,” Bankman claimed.

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