Sam Bankman-Fried, the CEO of the crypto exchange giant FTX, recently expressed his thoughts on the current state of the crypto market and the crypto companies associated with it.
During an interview with Forbes on Tuesday, SBF claimed that there are a large number of “third-tier” crypto exchange platforms that are insolvent, but they have never been exposed.
Several crypto companies are in serious trouble this crypto winter
He started by addressing some crypto companies whose financial crises are more public this crypto winter. These include crypto lending platform BlockFi and crypto broker Voyager Digital, both of which are suffering from serious contagion following Three Arrow Capital’s fallout.
FTX and Alameda Ventures provided quick credit lifelines worth $750 million to both BlockFi and Voyager. SBF commented on the deals by acknowledging that there is no guarantee that the exchange will get its money back. He stated:
“You know, we’re willing to do a somewhat bad deal here if that’s what it takes to sort of stabilize things and protect customers.”
Recently, Binance CEO Changpeng Zhao had also been found expressing similar views. As TheCoinRise reported, he believes that failing crypto projects should learn from these situations rather than seeking bailouts. SBF steed:
“There are crypto companies that are basically too far gone, and it’s not practical to backstop them.”
That group does not include market leaders like FTX, Binance, Coinbase, and other significant exchanges. Their internal operations more closely resemble relatively steady online stock brokerages, despite the fact that many have been driven into mass layoffs during the weak market.
Bitcoin miners are also affected
There are approximately 600 less well-known exchanges in the United States, many of which offer risky amounts of leverage that might wipe out both investors and the exchange itself.
SBF also added that he is keeping an eye on Bitcoin miners whose revenues have been sharp declines following May’s BTC crash. He believes that crypto companies that used Bitcoin on their balance sheets in 2021 during the “digital gold rush” might be in more serious trouble.