By Frances Yue
Crypto billionaire Sam Bankman-Fried, chief executive at FTX, said he and his company still have “a few” billion to backstop embattled digital asset companies, as crypto prices crash and the rather nascent industry struggles with ripple effects from the failure of several major players.
Bankman-Fried told Reuters that the worst of the liquidity crunch had likely passed, after crypto lender Celsius paused withdrawals beginning June 12, while crypto hedge fund Three Arrows and broker Voyager both filed for bankruptcy in the U.S.
In June, Bankman-Fried’s crypto-trading firm Alameda Research extended a $200 million cash and USDC /zigman2/quotes/226472410/realtime USDCUSD 0.00% revolver and a 15,000 BTC /zigman2/quotes/31322028/realtime BTCUSD +0.11% revolver to Voyager.
Last week, FTX US signed a deal to bail out embattled crypto lender BlockFi, which found itself in a perilous fiscal situation after it reportedly lost about $80 million resulting in exposures to Arrows. FTX US said it would provide a $400 million revolving credit facility, while the deal also includes an option for FTX to buy BlockFi at a maximum price of $240 million, based on performance triggers.
Bankman-Fried told Reuters that the firm still had enough cash on hand to do a $2 billion deal if necessary, though “it does get increasingly expensive with each one of these.”