FTX is ready to use $2 billion in cash to bail out the crypto industry and stop the contagion

0

FTX has “enough cash to strike a $2 billion deal if needed” to help prop up the crypto industry through tough times, CEO Sam Bankman-Fried says Reuters.

SBF also said CNN that FTX has remained profitable throughout the bear market and is expected to continue to do so.

When it comes to the bear market unfolding in the crypto industry, SBF agreed with insiders who spoke to CryptoSlate this week.

“What we’ve seen so far might be healthy, in that what it’s doing is flushing out some of the leverage that needed to be flushed out, flushing out some of the players that were just not not sufficiently capitalized.

However, there was an element of surprise from SBF as to how deep prices have fallen, saying “it’s a bit worse than I expected,” according to the report on the 6th. July from Reuters.

The next investment for FTX

SBF denied that it is investigating Bitcoin mining companies as it believes it is not an industry that needs support at this time as “anyone can come and fill in the hashrate”. A key criterion for FTX is the need to protect clients by facilitating additional credit due to over-leveraged positions.

In response to a question about FTX’s acquisition of Robinhood, SBF said, “I don’t think you can ever rule anything out,” citing synergies between the two exchanges and potential partnerships in the future.

The CEO confirmed he “might never get it cheaper” about Robinhood’s sharp drop in stock price. As of this writing, shares of Robinhood are trading at just $8.68, down from a high of $55. However, he claimed that there are no “active discussions” at present.

SBF also denied any rumors that FTX was looking to acquire Coinbase while praising the work done by its rival and that it was a potentially attractive investment opportunity.

Regarding FTX’s lending activities, SBF said that

“The key players we are looking for to extend credit are those who have built a good business, customers who need protection, and we are trying to prevent contagion from spreading through the ecosystem.”

In the interview with Reuters, SBF put a marker in the ground, saying “if all that mattered was one event, we could top a few billion.”

Voyager, a recent SBF investment, filed for Chapter 11 bankruptcy. The FTX CEO did not comment on how this might affect the credit agreement he has in place. Voyager still has access to a loan of $125 million and 15,000 bitcoins after drawing $75 million in the first month.

FTX is always profitable

Unlike many of its competitors, SBF noted that FTX made “money every quarter, we have a few in a row, and that includes the most recent one.” He continued, “We have been profitable all along and intend to remain profitable.”

When it comes to how FTX has been able to stay profitable, SBF said reviewing marketing overspend is not the main issue. For him, the most critical area where others have failed is “staffing,” as he believes too many companies in the crypto industry have overstaffed their teams to facilitate high growth.

Share.

About Author

Comments are closed.