Sambankman Fried spends a lot of money to save a failed crypto venture
To an unregulated industry that lacks a central savior.
He told NPR last month that he felt he was forced to “stem transmission.” And when he spoke to Forbes last week, Bankman Fried said that FTX, the cryptocurrency exchange he founded and is in control of, said, “If it’s necessary to stabilize things, here. I want to make a rather bad deal. “
These bad deals have risk assets
.. Last month, he provided Voyager Digital with up to $ 500 million in cash and cryptocurrencies, and $ 250 million in credit to BlockFi.
The rescue urged the declaration that Bankman Fried was the lender of last resort. Anthony Scaramucci even anointed him as the “new John Pierre Pont Morgan”. His bailout of the US financial system over 100 years ago helped create the Federal Reserve.
However, this was not the first time Bankman Fried had come to the rescue. Last August, FTX provided a $ 120 million loan to the Japanese cryptocurrency exchange Liquid Group after being hacked for $ 100 million.
In essence, Bankman-Fried has emerged as a central banker in the crypto market when digital assets are plunging.And analysts go on to say he may not be alone in the future
Within the crypto market, you are given the opportunity to dive into other millionaires.
“Yes, Sam was the first person,” said Chris Blendler, managing director and senior research analyst at DA Davidson. He added that the crypto situation reflects the situation of the 2008 financial crisis, “larger exchanges are prioritized to limit systemic risk.”
Meanwhile, Binance founder and CEO Changpeng Zhao has also served as a crypto savior. In April, Binance led a $ 150 million funding round for Sky Mavis, the parent of the $ 625 million hacked Play-to-Earn game Axie Infinity.
“We strongly believe that Sky Mavis will bring more value and growth to the larger industry and we need to help them as they are working hard to resolve recent incidents.” Zhao said at the time.
More recently, he made a broad statement last month about cryptographic bailouts. In a June 23 blog post, Zhao wrote, “We also have a responsibility to help players in the industry survive and hopefully prosper, given Binance’s sound cash reserves.”
Indeed, such rescues may not be completely altruistic. Bankman-Fried and Zhao, as heads of crypto exchanges, are interested in preventing the collapse of the sector.
And Bankman Fried may not want to miss a bargain. On Friday, BlockFi announced a $ 400 million credit facility transaction from FTX US. It has the option to buy for up to $ 240 million.
Before the deal was announced, OANDA analyst Edward Moya said, “Waiting for the SBF to play chess, the rest of the cryptoverses to checkers, and the latest crash to bottom out. There seems to be. ” “Many crypto companies are approaching bankruptcy and SBF is positioning itself to take advantage of some very attractive discounts.”
The acquisition of BlockFi follows previous precedents. After extending its lifeline to liquid, FTX acquired the company in February. And more deals may come.
“”[There’s] There is no doubt that others will raid assets as the situation progresses. It’s not limited to cryptocurrency players, “said Martha Reyes, Head of Research at BEQUANT.