During a period of 14 days in June, Sam Banksman-FriedThe Quant Trading Wonderkind turn to cryptomilonario, a bargaining spree unlike any other in the industry’s short history began. The transactions took place in dizzying succession: Sam, co-founder and CEO of the exchange ftx digital assets Bought two companies BlockFi pointed to cryptographic platform And tried to save another, Voyager Digital, with a big debt.
gross, Banksman-Fried pledged nearly a billion dollars (million), a staggering amount to risk (even for someone with a net worth of $10 billion) in the middle of a The cryptographic crisis that has faded $2 billion in eight months in market value. For their fans, this is further proof that SBF, as they call them, is the custodian of the cryptocurrency, a generous and wealthy investor who defends the industry in its darkest hours.
Perhaps. But an alternative explanation is that, like John Pierpont Morgan a century ago and Warren Buffett in modern times, Banksman-Fried Is Using Rivals’ Misfortunes For expand your empire without spending much. And if he wants to save the industry with the bailout he’s organizing, it’s actually because the crisis, if it’s big enough, could hit his business as well. “He’s not doing it for the good of his heart, his ambition knows no boundsChris McCann, general partner at Race Capital, one of the first venture firms to invest in FTX, the parent company of SBF.
Does Bankman-Fried Control the Cryptocurrency Industry?
This can be reversed, as was the case with Voyager Digital Bankruptcy Filing the day after salvage loan, But if it works, the SBF will have extensive direct and indirect control of the industry. This paints a worrying picture for crypto converts who believe that decentralization is what sets their market apart. “It is dangerous for the entire industry to have a connection to FTX,” says Elliot Chun, partner at M&A and strategic financing advisory firm Architect Partners. “It generally doesn’t bode well for a free market scenario.”
The biggest risk to the industry will be if no one takes action, says SBF. “The last thing we wanted was the spread of the contagion. The last thing we wanted was for the client’s assets to be unsecured,” he says. The question “is there any good investment we can make in return? That was secondary.”
Still, his public comments and behind-the-scenes tricks show that more and more big deals are almost certainly on the horizon. bloomberg he told that FTX was looking to buy Robinhood MarketsThe brokerage app that was worth around $60bn in recent months before losing market capitalization.
But the SBF said no active talks took place. last year also Someday the idea came to buy Goldman Sachs Group, It is not known whether he was joking. Banksman-Fried started relatively late in the crypto waters. An MIT physics graduate, he didn’t fully immerse himself until 2017, when he left quantitative trading firm Jane Street to start his own company, Alameda Research. Focusing on cryptocurrency, he soon made a name for himself, as Almeida quickly rose to an online ranking that ranked merchants’ performance.
they are The growing influence came in handy when they decided to start FTX in Hong Kong Two years later (located in the Bahamas today). With low commissions and attractive products, it soon became one of the largest platforms in crypto derivatives trading. It is estimated that it owns more than 50 percent of FTX, 70 percent of FTX US (which debuted in 2020), and almost all of Alameda.
The crypto millionaire who goes on a bargain hunt
bankman-fried Have efficiently managed your company’s capitalEndorsing profitability on a ‘grow at all cost’ approach, says crypto investment strategist Lynn Alden, which has bankrupted many of its rivals. This allowed him to go on a bargain hunt while the rest of the crypto world reels.
In June it bought Bitvo (a Canadian cryptocurrency trading platform) and Embed Financial Technologies (a brokerage services company). when Cryptocurrency decline sharp in view of Stablecoin TeraUSD collapse And under the influence of Celsius Network and Three Arrows Capital, Bankman-Fried made two of its biggest moves ever: lent $485 million to troubled broker Voyager Digital and bailed out the lender. cryptoactivos blockfi With a revolving credit lifeline of $400 million that came with the option to buy the company.
Voyager went bankrupt before taking advantage of the loan, “We didn’t have months to do our due diligence. We didn’t have weeks, we had two days,” says Bankman-Fried, adding that the goal was to protect clients’ assets, not promote their own business.
BlockFi deal looks better, Industry observers say he probably gave the company a final value of $3 billion for a few dollars. Dan Matuszewski, co-founder of CMS Holdings, which has invested in both BlockFi and FTX, said the bailout was also a strategic decision to help FTX US build its brand and reach more potential customers. The acquisition could help Bankman-Fried further expand into crypto lending.
Bankman’s Fried Dice what His team has analyzed about 10 dealsEven with Celsius and Terra, which he rejected. He mentioned that he supported some companies in which his involvement has not been made public. His team is reaching out to companies that are rumored to be in trouble, studying their balance sheets to figure out what needs to be done to save them. “I don’t know of any other big companies that are about to go down,” he says, “I can’t promise there aren’t any. Hopefully we’ve gone through the worst.”
Considering how much power Bankman-Fried is accumulating, some in the industry already smell of trouble, especially when you factor in Alameda Research, which has grown to be an influential venture capital and trading firm. “Can one imagine a scenario where if FTX continues at these levels, who else will exist?” The architect asks Chun from Partners.
las Voyager and Celsius Bankrupt Bankman-Fried’s wide influence in the industry was brought to light. Voyager disclosed the network of investments and loans made and received between the company and Alameda, and Celsius identified Alameda as one of its creditors. “The thing about FTX and Alameda is that they can make or break a project,” warns Toby Lewis, CEO of analytics firm Novum Insights.
For many, Banksman-Fried, with his distinctive wild locks and promises of giving up almost all of his wealth, is a cultural figure that crypto enthusiasts can root for. He is active on Twitter and is not afraid to ask questions about the industry and its future. “Decentralization still needs a benchmark,” says Matthew Roszak, co-founder of blockchain technology firm Blok Inc. But that doesn’t mean that Bankman-Fried can’t be opportunistic when his rivals are desperate. McCann of Race Capital says He’s not a “kind and gentle savior.” “I won’t make fun of myself for a minute.”
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