FTX has some reserves to assist failing firms: Bankman-Fried

FTX CEO, Sam Bankman-Fried says that the company still has some billion left to assist failing companies. The bear market has been going on for a while now.

The whole cryptocurrency market has lost more than 65% of its value over the past eight months. The total market cap is now below $1 trillion.

Exchanges have been feeling the heat as well. With trading volumes drying up, many exchanges have had to lay off staff or close down altogether.

FTX is one of the exchanges that have been hit hard by the market downturn. The exchange has lost 40% of its value since it launched in May 2019.

However, FTX is not giving up just yet. The exchange has reserves to help failing firms, according to CEO Sam Bankman-Fried.

Some cryptocurrencies have been struggling to stay afloat as a result of the bear market. Voyager Digital, one of the most well-known crypto brokers in the business, declared bankruptcy yesterday afternoon.

However, one of the world’s major cryptocurrency exchanges, FTX, has been aiding struggling firms. According to a Reuters interview with the CEO, Sam Bankman-Fried. The firm has yet to spend all of its remaining funds assisting distressed businesses. He says;

“We’ve started to get a few more companies reaching out to us. Those businesses are generally not in bad situations, although some smaller crypto exchanges may still fail, he added. The industry has passed the point when other huge shoes have to fall.”

Bankman-Fried’s cryptocurrency-trading business, Alameda Research. Gave Voyager Digital a $200 million cash and stablecoin revolving credit line as well as a bitcoin facility before its bankruptcy.

Last month, BlockFi received a $250 million revolving credit facility from FTX. A few days ago, BlockFi announced that it has accepted an offer to be bought for $240 million by FTX. 

The goal of the bailouts, according to Bankman-Fried, is to safeguard client assets. While also avoiding any harm to the cryptocurrency market as a whole. He states;

“Having trust with consumers that things will work as advertised is incredibly important and if broken is incredibly hard to get back. It does get increasingly expensive with each one of these. If all that mattered was one single event, we could get above a couple billion.”

“It has enough cash on hand to complete a $2 billion transaction if required,” he informed. When asked about his feelings regarding the current bear market, Bankman-Fried said it is worse than he had anticipated. He says;

“I don’t think it’s an existential threat to the industry, but I do think it is a fair bit worse than I would have anticipated.”

FTX is not the only exchange that is helping companies in trouble. Binance, the world’s largest cryptocurrency exchange by trading volume, recently announced its incubation program to help blockchain startups.

It is heartening to see exchanges come together to help struggling firms during these difficult times. It shows that the industry is maturing and exchanges are becoming more responsible. Hopefully, this will lead to more stability in the crypto markets in the future.

In July of this year, FTX overtook Coinbase. To become the leading cryptocurrency exchange in terms of overall trading volume in the United States. The exchange has been growing rapidly and is now one of the largest exchanges in the world.

Bankman-Fried is the CEO of FTX and he believes that the exchange has a responsibility to help firms that are failing. He says:

“If you look at other exchanges, like Binance, they have an incubation program where they help projects that might be struggling. We want to do something similar at FTX, where we have a fund to help these companies.”

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