Crypto is not too big to fail.īankman-Fried clearly has deep pockets, but his wealth is tied up almost entirely in crypto: Bloomberg data estimates $6.6 billion comes from his stake in Bahamas-based FTX, $2.1 billion from FTX’s separate U.S.-based subsidiary, $1 billion from the trading firm Alameda and $420 million from his recently-acquired stake in trading app Robinhood Markets Inc. in 2008.īut strip away the hype, and it still looks like turtles all the way down. Others have compared it to Warren Buffett’s support for Goldman Sachs Group Inc. “Bankman-Fried is the new John Pierpoint Morgan,” says Anthony Scaramucci, citing the 1907 banking crisis that saw Morgan and his peers pledge their own money to stop a loss of faith in the financial system. Sam Bankman-Fried, co-founder of FTX Trading Ltd., has extended a $250 million credit line to lending platform BlockFi Inc. He’s made an additional $200 million of credit and a separate 15,000-Bitcoin revolving facility available to Voyager Digital Ltd., a Toronto-based crypto broker that’s owed $660 million by troubled digital-asset hedge fund Three Arrows Capital Ltd. And Changpeng Zhao, the head of rival digital exchange Binance, spoke of a 'responsibility' to help struggling crypto firms after effectively compensating victims of crypto game Axie Infinity's hack earlier this year.įans say this adds a credible backstop to a $1 trillion market. The next phase features bailouts, as the big players atop the ecosystem of crypto-speculation - billionaire-run exchanges - step in to try to stem panic and restore trust.
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