FTX CEO Sam Bankman-Fried shared key takeaways from the recent crypto bear market and the bailing out of companies during the time. The CEO also shares what went into what companies to support and being labeled the J.P. Morgan of cryptocurrency.
What Happened: An effort to bail out cryptocurrency companies during the bear market has seen “mixed” results, according to Bankman-Fried.
FTX spent around $1 billion to help struggling companies, but not all of the investments have turned into wins for the company, Bankman-Fried said in an interview on Bloomberg’s “David Rubenstein Show: Peer-to-Peer Conversations.”
“I think some were going to turn out to be profitable, some won’t be. We had to make snap judgment calls,” Bankman-Fried said.
The FTX co-founder highlighted a deal with Voyager Digital with a proposed $485 million loan as one that went bad, as the company filed for bankruptcy in July. Voyager rejected FTX’s proposal.
Bankman-Fried has high hopes for deals it did complete, like a $400 million revolving credit facility for BlockFi Inc. The deal includes the potential for FTX to buy the company outright.
“(Blockfi had) just sort of burned through their runway, had a functional business with a strong team and just needed more cash.”
Lending money to struggling cryptocurrency companies earned Bankman-Fried comparisons to John Pierpont Morgan, better known as J.P. Morgan. Bankman-Fried welcomes the comparison to the man responsible for the early days of JPMorgan Chase (NYSE: NYSE:JPM) and helped loan money to companies during the 1907 banking crisis.
“It doesn’t bother me too much. I think it’s something I thought was the right thing for the industry.”
Bankman-Fried said the goal was to do okay deals and not make a fortune supporting the industry.
“Your goal is for us to not get our faces ripped off. But contingent on that, you know, do as much as we can to bail out the industry.”
Related Link: FTX Chief Sam Bankman-Fried Visited White House In May
What’s Next: Bankman-Fried said he often goes to Washington, D.C. to lobby Congress. He noted that there are questions on whether the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission will regulate the crypto space.
“What we’ve tried really hard to do over the last year is get the industry to a place where it is happy to accept sensible regulation,” Bankman-Fried said
Bankman-Fried is fine with either commission taking charge of regulation for the crypto space.
The FTX CEO said he isn’t super worried about the falling price of Bitcoin (CRYPTO: BTC) or the bear market. Bankman-Fried said things could have been worse than they are today.
“If we saw things melt down much further than they did, if we saw NASDAQ drop 30%, 40% from here and Bitcoin go down to $10,000 per token, I think you would see another round of pain for the industry.”
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