The CEO of FTX, Sam Bankman-Fried (SBF) discussed the number of financial resources left at his disposal for preventing the collapse of businesses with depleted liquidity in his most recent interview with Reuters. He also set forth his selection criteria for businesses that he believed should be spared.
SBF’s Plan of Rescue
SBF, the 30-year-old FTX boss recently expanded the revolving credit facility for BlockFi from $250 million to $400 million in order to keep his commitment to spearhead the rescue effort for struggling crypto companies. A similar credit facility for a total of $200 million was furthermore provided by the exchange to Voyager, which filed for bankruptcy on Tuesday due to losses stemming from its exposure to 3AC.
Reuters claims that SBF’s exchange still has “a few billion” in funds available in reserve for helping distressed companies. The funding comes from FTX Ventures, the investing arm of FTX and a $2 billion venture capital firm that specializes in investing in digital assets.
The crypto billionaire acknowledged that each rescue has “become more expensive” than the ones before it, but said that FTX could still use a few billion dollars for “one single event” if that is “all that matters.” He stressed that it was not his favorite tactic.
In support of his bailout plan, he argued that it’s critical to restore customer confidence, safeguard their interests, and prevent the crypto winter from spreading to other poorly positioned enterprises. He feels that the current crash has gone “a little worse” than he had anticipated. Even tiny businesses have contacted FTX for financial support as the slaughter spread to all facets of the industry, the CEO disclosed.
In a different interview with CNN, SBF went into great detail about his philosophy for determining which companies merit bailouts:
“The key type of players we are looking for to extend credit to are the ones that build the good businesses, ones that have customers need protecting, where we’re trying to stop engaging to spread to the ecosystem, and where there is a long-term sustainable pathway forward.”
No intentions to purchase Bitcoin miners
In response to the most recent rumor that FTX will enter the Bitcoin mining business, SBF said that it is one of the few industries in the field that he does not find interesting because it is neither a “customer protection area” nor “an area of liquidity.”
He added that while FTX is still open to speaking with any company, including miners from the industry, investing in miners is not the company’s current top priority.