In the latest interview with Reuters, FTX CEO Sam Bankman-Fried (SBF) revealed the amount of financial ammunition still available for saving companies with drained liquidity from collapses. Meanwhile, he laid out his criterion for picking companies considered worth to be saved.
SBF’s Bailout Strategy
To fulfill his promise of leading the rescue program for struggling crypto firms, the 30-year-old FTX boss has lately increased the revolving credit facility for BlockFi from $250 million to $400 million. Besides, the exchange also gave out a similar credit facility worth a total of $200 million to Voyager, which, facing losses from exposure to 3AC, filed for bankruptcy on Tuesday.
According to Reuters, SBF’s exchange still has “a few billion” in cash ready in reserve for bailing out troubled firms. The capital derives from FTX’s investing arm – FTX Ventures – a $2 billion venture capital fund focusing on digital asset investments.
Admitting that each bailout has “become more expensive” than the prior ones, the crypto billionaire noted that FTX could still deploy a couple billion for “one single event” if that is “all that matters.” However, it was not his preferred strategy, he added.
To back up his bailout strategy, he said it’s crucial to rebuild consumers’ trust, protect their interests, and stop the domino effect from hitting additional poorly positioned firms amid the crypto winter. In his view, the ongoing crash has gone “a bit worse” than he expected. As the bloodbath seeped through every corner of the industry, even small firms have reached out to FTX for financial assistance, the CEO revealed.
In another interview with CNN, SBF provided in-depth insight on his principle in selecting which firms are worth to be bailed out:
“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 Plans to Invest in Bitcoin Miners
Regarding the latest rumor of FTX stepping into Bitcoin miners, SBF replied that it represents one of the few sectors in the space that do not interest him because it is not a “customer protection area” nor “an area of liquidity.”
He further emphasized that investing in miners is not even close to the company’s current priority while stating that FTX remains open to communicating with any firm, including miners, from the industry.