The second-richest crypto billionaire is warning that some digital asset companies are facing financial difficulties as the market downturn continues.
Forbes reports that FTX co-founder and CEO Sam Bankman-Fried believes some lesser-known crypto exchanges are already bankrupt.
“There are some third-tier exchanges that are already secretly insolvent.”
According to the report, Bankman-Fried is of the view that some of the digit asset firms facing difficulties are unsalvageable.
“There are companies that are basically too far gone and it’s not practical to backstop them for reasons like a substantial hole in the balance sheet, regulatory issues, or that there is not much of a business left to be saved.”
The report says the FTX CEO’s goal in financially aiding struggling crypto firms is to stabilize the affected businesses and safeguard users.
“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.”
Last week FTX injected approximately $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. The funds will be used to safeguard customer assets amid market volatility.
Bankman-Fried is ranked 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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