Billionaire FTX founder and CEO Sam Bankman-Fried said his exchange has a “responsibility” to bail out ailing crypto companies in times of crisis.
Speaking to NPR this weekend, Bankman-Fried said of the current crypto crash that, “I do feel like we have a responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion.” He added that, “Even if we weren’t the ones who caused it, or weren’t involved in it. I think that’s what’s healthy for the ecosystem, and I want to do what can help it grow and thrive.”
The recent cryptocurrency crash has seen Bitcoin plummet to prices below $18,000. The top cryptocurrency has since recovered somewhat, though at its current price of $20,600, it’s still well below half the value it started the year at.
“The core driver of this has been the Fed,” Bankman-Fried said, referring to the Federal Reserve’s decision to raise interest rates by 0.75%, the largest hike since 1994. This has had a knock-on effect on crypto prices; when fiscal policies tighten, people dump their riskier assets. “Literally, markets are scared,” said Bankman-Fried. “People with money are scared.”
In August 2021, FTX helped Liquid Group with a $120 million loan to recuperate losses from a $90 million attack that happened when Liquid’s digital wallets were compromised.
“We, I think about 24 hours later, stepped in and gave them a pretty broad line of credit to be able to cover all of their demands, to make sure customers were made whole, while thinking about the longer-term solution.”
SBF weighs in
Bankman-Fried is something of a thought leader in the industry. His Twitter is often a hive of opinions on current industry affairs and speculation on the future of crypto.
Responding to a tweet asking industry figures how best to guard against another crisis like 3AC, Bankman-Fried tweeted “regulation can help here” before following up with, “so can DeFi,” adding the crisis would not have been possible with transparent on-chain decentralized finance apps to keep institutional credit transparent to retail investors.
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