It’s a Sam Bankman-Fried moment. The golden boy of FTX and Alameda Ventures has put both of his companies in a winning position and appears to be carrying the spoils. The recent Forbes article about secretly insolvent stock markets says it best: “Like JP Morgan during the stock panic and crash of 1907, Bankman-Fried is taking advantage of the crypto chaos to expand his empire.” Rumors of his involvement in engineering the “crypto chaos” appear to be greatly exaggerated.
“Over the last few weeks, the crypto market has been trending down. The contagion effect of the Terra/Luna extinction shook every company, most notably those that offered returns on cryptocurrency deposits like BlockFi and Celsius and hedge funds like Three Arrows Capital. The problems of these companies and the possible liquidation of assets, in turn, have thrown the crypto market into even more turmoil.”
In the Fobes article, discussing the rescue of BlockFi and Voyager, they paint a similar picture with a key difference. Here Bankman-Fried performs the sacrifice:
“Between FTX and his quantitative trading firm Alameda, he has provided companies with $750 million in credit lines. There is no guarantee that Bankman-Fried will recoup its investment. “You know, we’re willing to do a little bit of bad work here if that’s what it takes to kind of stabilize things and protect customers,” he says.
And, as you can read, that’s according to Bankman-Fried himself. A few lines below, the article questions his assessment: “Bankman Fried’s cash infusion is far from altruistic. He emerged as a savvy vulture capitalist in the beleaguered crypto market, knowing full well that his fortunes depended on its healthy recovery and growth.”
Robinhood price chart on NASDAQ | Source: TradingView.com
Bankman-Fried sets its sights on small exchanges and miners
Rumors that FTX is looking for way to get Robinhood circulated today. A Forbes article elaborates on the subject. “Bankman Fried has also acquired crypto brokerage Robinhood, where FTX has already accumulated a 7.6% stake, and is rumored to be considering an acquisition.”
Not only that, Forbes estimated that there are more than 600 crypto exchanges in the world. Then, Bankman Fried is quoted as saying, “there are some third-tier stock exchanges that are already secretly insolvent.” Is the implication that his two companies are considering buying one of them? Maybe. However, Bankman Fried will be picky about exactly which:
“There are companies that are basically too far gone and it’s not practical to prop them up for reasons like a significant balance sheet hole, regulatory issues or because there’s not a lot of business left that can be saved.”
In a strange turn of events, Bankman-Fried, one of the biggest proponents of Proof-Of-Stake, expressed interest in “crypto miners”. Even more strangely, the article then goes on to list two bitcoin mining companies. Who introduced the word “crypto” to the conversation, Bankman-Fried or Forbes?
“Bankman-Fried also has an eye on crypto miners, many of whom have leveraged their balances at breakneck speed to quickly scale and capitalize on this 21st century digital gold rush. Shares of publicly traded crypto miners, including Marathon Digital Holdings and Riot Blockchain, are down more than 60% year to date.”
Terminating with Tether for some reason
Without warning or apparent reason, the Forbes article ends with Sam Bankman-Fried’s thoughts on Tether. “I think the really bearish views on Tether are wrong… I don’t think there’s any evidence to support them,” he says.
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