FTX’s CEO has admitted that the bailouts issued to some crypto companies were snap judgments, and the results have been mixed so far.
Sam Bankman-Fried, FTX’s CEO, has admitted that some of the bailouts issued to cryptocurrency companies were snap judgments. He made this known during a recent interview with Bloomberg.
Bankman-Fried admitted that FTX spent nearly $1 billion to help out struggling cryptocurrency companies during this ongoing Crypto Winter. However, not all the bailouts yielded positive results. He said;
“I think some were going to turn out to be profitable, some won’t be. We had to make snap judgment calls.”
Bankman-Fried admitted that the deal struck in June with embattled cryptocurrency lender Voyager Digital went badly. FTX’s sister company, Alameda Research, issued a $485 million loan to Voyager earlier this year, but the funds weren’t enough to keep the company from filing for bankruptcy a month later.
The FTX CEO added that he had higher hopes for other deals he orchestrated, including one with BlockFi. FTX.US agreed earlier this year to issue a $400 million credit facility to the crypto company in exchange for an option to purchase the lending platform outright. He said;
“BockFi had just sort of burned through their runway, had a functional business with a strong team and just needed more cash to be able to operate effectively going forward.”
Bankman-Fried said his support for struggling companies is fueled by FTX’s profitability and fundraising. He added that the ultimate goal of the bailouts was to support struggling companies instead of maximizing on deals.
Talking about the broader crypto market, Bankman-Fried said he often goes to Washington to lobby Congress on behalf of the crypto industry.
He said he is fine with any of the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFT) taking charge of regulating the crypto space. The FTX boss added that;
“So, in the end, both are going to be regulators. And, you know, the CFTC is going to regulate commodity futures, so it’s going to regulate very likely futures on tokens that are not securities. The SEC is very likely going to end up regulating spot security token markets. In principle, I’m fine with either regulator or any combination of them. I think that the non-security token aspect of this is a nice fit for the CFTC’s regime.”
FTX is one of the leading crypto exchanges in the world and has experienced massive growth over the past two years.