Sam Bankman-Fried, CEO of FTX, one of the world’s largest crypto exchanges, wouldn’t have an issue saving (even more) struggling companies amid the latest market downturn.
Bankman-Fried, who has already extended hundreds of millions in revolving lines of credit and been the center of takeover rumors, told Reuters that FTX still has a “few billion” to support the industry.
FTX has drawn from its $2 billion venture capital fund, FTX Ventures, to help shore up firms struggling with liquidity, Reuters reported. Though it announced the fund in January, Bankman-Fried noted that FTX still has enough cash to do a $2 billion deal if needed.
“It does get increasingly expensive with each one of these,” Bankman-Fried said.
Bankman-Fried’s remarks on his remaining dry powder comes as many firms struggle to stay afloat due to the crypto industry credit crisis.
After the May collapse of the Terra stablecoin and surrounding ecosystem battered the already struggling space, forced selling and liquidity issues cascaded throughout the market. By early June, Celsius Network, one of the largest crypto lenders, paused its withdrawals, and soon rumors of bankruptcy spread. Then the sizable crypto hedge fund Three Arrows Capital (3AC) was soon on the brink of insolvency, fueling fears of industrywide contagion and systemic risk. Three Arrows subsequently entered a court-ordered liquidation outside the U.S., and filed for bankruptcy protection in New York.
Since these big dominoes fell, many companies have disclosed their collateral damage from the demise of Terra, Celsius and 3AC. And a few have reached out to FTX for help, Bankman-Fried told Reuters.
“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.
FTX recently reached a deal with distressed cryptocurrency lender BlockFi, which includes a $400 million revolving credit facility and an option to acquire the platform at a variable price of up to $240 million. Previously, BlockFi had disclosed that it had signed a term sheet with FTX to secure a $250 million revolving line of credit.
Quant trading shop Alameda Research, founded by Bankman-Fried, separately gave crypto lender Voyager Digital a $200 million cash and USDC revolver, or line of credit, and a 15,000 Bitcoin revolver. On Wednesday, Voyager filed for bankruptcy.
Despite the carnage, Bankman-Fried told Reuters he thinks the worst has passed.
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