The chief executive of the FTX cryptocurrency exchange says that so far his company’s bailout efforts within the industry have achieved mediocre results.
In an interview with Bloomberg, FTX CEO Sam Bankman-Fried tells host David Rubenstein that not all of his firm’s efforts to shore up ailing crypto companies have been profitable, including money spent on embattled crypto broker Voyager Digital.
“Mixed, is basically the answer. I think some are going to turn out to be profitable, some won’t be. With Voyager, there’s $70 million that we put in and I’m not sure we’re ever seeing [it] again.
We had to make snap judgment calls and we made them such that if things turned out well, they’d be good investments. If they turned out badly, they’d be bad investments, but we sort of limited the amount we could lose from it.”
When asked how FTX came up with the funds to provide the loans, the billionaire says,
There were a few different versions of it. One piece was just the FTX balance sheet. We keep our corporate cash in dollars, and we’ve raised several billion dollars over the course of the last couple of years. We’re a profitable business.
We’d also done some acquisitions, which partially balances that out, but we had some cash left. And with the BlockFi deal, for instance, I think that was on FTX.US’s balance sheet.”
Back in the early summer, the BlockFi lending platform reached an agreement with FTX.US for a $400 million revolving credit facility, plus an option for FTX to acquire BlockFi at a variable price of up to $240 million.
The CEO goes on to explain what motivated FTX to help crypto companies that were in need,
“I think it’s something I felt was right for the industry. Our very explicit mandate that we gave to the team of people working on this was, ‘Your goal on this is not to make a fortune. Your goal is to do okay deals [and] for us not to get our faces ripped off.’
But contingent on that [was also to] do as much as we can to bail out the industry. The higher goal was trying to backstop places rather than maximizing on these deals.”
Earlier this year, FTX spent hundreds of millions of dollars propping up crypto businesses.
Bankman-Fried told Decrypt’s GM Podcast nearly a month ago that he was disappointed by the lackluster response from other big players in the crypto space when it came to stepping up to help bail out struggling companies.
“On all of these sort of bailout things we’ve tried, we reached out to everyone we could to assist us…
Our sense has been that there, to a disappointing extent, haven’t been that many people who have actually been game to pitch in.
We’ll do it if no one else will. We think that’s the right thing to do.”
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