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Sam Bankman-Fried, the CEO and co-founder of major crypto exchange platform FTX, says he doesn’t mind being referred to as the “JP Morgan of crypto” for his role in bailing out other crypto companies.
During a recent interview with Bloomberg, Bankman-Fried also talked about where his company got funds to complete deals amid a crypto winter that saw Bitcoin (BTC/USD) fall to lows of $17,600 in June.
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As many crypto companies struggled amid the bear market crash, FTX had the money to splash on acquisitions and offer rescue facilities to embattled firms. Where did the exchange get the money to do these deals?
The FTX boss explained:
“So, there were a few different versions of it. And you know one piece of this was basically the FTX balance sheet – like we keep our corporate cash just in dollars. And so we’d raised a few billion dollars over the course of the last couple of years. And we’re a profitable business.”
Even as it spent on deals, FTX was able to “partially” balance its balance sheet via earlier acquisitions. Also, some of the deals, like that with crypto lender BlockFi, was handled by FTX.US – which incidentally had also raised $400 million from investors earlier in the year.
JP Morgan of crypto
Akin to J.P Morgan’s when Wall Street’s hit turmoil in the early 20th century, Bankman-Fried has earned comparison and even called the ‘JP Morgan of crypto’ for his firm’s role in bailing out some crypto companies. He says this doesn’t bother him that much.
On why he felt he needed to do something, he said that he thought it was “the right thing for the industry.”
He said that his company had a team of people working on the deals, who had a “very explicit mandate” – not to seek deals that would make a fortune for FTX, but ones that were “okay”.
The team’s goal, he noted, was however to ensure the company didn’t get its face “ripped off.” The higher goal was to bail out rather than maximising on deals. And if someone else would have done, FTX would have supported that, he added.