Sam Bankman-Fried, head of one of the largest cryptocurrency exchanges, FTX, 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, but that the worst of the liquidity crunch has likely passed.
Bankman-Fried's crypto-trading firm, Alameda Research, 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. On Wednesday, Voyager filed for bankruptcy.
"Having trust with consumers that things will work as advertised is incredibly important and if broken is incredibly hard to get back," he said. "If all that mattered was one single event, we could get above a couple billion," he said, stressing that isn't his preference. Bankman-Fried also in May revealed he had personally taken a 7.6 per cent stake in Robinhood Markets Inc, capitalizing on the trading app's weakened share price.
"I don't think it's an existential threat to the industry, but I do think it is a fair bit worse that I would have anticipated," Bankman-Fried said.