FTX CEO Sam Bankman-Fried has rushed to the rescue of ailing crypto firms so quickly amid the current crash that he is being compared to John Pierpont Morgan (the man himself, not the bank) in 1907. Now his rivals are taking note, and they want in on the bailout race.
Last month, FTX extended a $250 million line of credit to battered crypto lender BlockFi. One day later, Alameda Research, another SBF company, gave Voyager Digital a $500 million line of credit. Two weeks later, FTX came to terms to acquire BlockFi outright. SBF reportedly walked away from giving Celsius a similar rescue. And he told Reuters last week that FTX still has “a few billion” to help out other companies with one foot in the grave.
This isn’t about magnanimity, and it’s hard to see this as a positive for the crypto industry.
In Voyager’s case, it turns out Alameda already owed Voyager $377 million. It isn’t often you see a borrower bail out its lender. Binance CEO CZ criticized that Voyager bailout, telling us in an interview for the next gm podcast, “I would never do that type of deal. I would never say, ‘I will invest in your company and then you loan me some money.’ I would just not invest in that company, I’ll keep my money.”
Fair enough. But CZ obviously wants in on the bailout bonanza. He told us, “We’re looking at a high number of deals” amid the crypto liquidity crisis, “and some of them are actually good deals. So I think you will see that we will be investing, bailing out, saving…
