The second-richest crypto billionaire warns some digital asset companies are facing financial difficulties as the market downturn continues.
Forbes reports that Sam Bankman-Fried, co-founder and CEO of FTX, believes some lesser-known crypto exchanges are already bankrupt.
“There are some third-party exchanges that are already secretly insolvent.”
According to the report, Bankman-Fried believes that some of the companies with digital assets that are facing difficulties are beyond salvage.
“There are companies that are basically already too far away and it’s not practical to support them for reasons like a significant hole in the balance sheet, regulatory issues or the fact that there isn’t much business left to save.”
The report states that the FTX CEO’s goal in providing financial support to struggling crypto firms is to stabilize the affected companies and protect users.
“You know, we’re willing to do a bit of a bad deal here if that’s necessary to somehow stabilize things and protect customers.”
Last week, FTX injected around $250 million into crypto lender BlockFi to bolster its balance sheet after digital asset prices plummeted.
Earlier this month, crypto platform Voyager Digital received a revolving line of credit consisting of $200 million in cash and 15,000 bitcoin from Alameda Research, a quant trading firm founded by Bankman-Fried. Funds are used to protect client assets amidst market volatility.
Bankman-Fried ranks second in the Forbes 2022 list of the world’s richest crypto billionaires with a net worth of $24 billion. The world’s richest crypto billionaire is Binance co-founder and CEO Changpeng Zhao, who has a net worth of $65 billion.
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