Cryptocurrency exchanges may set off a “wave of closures”! SBF: Some companies are privately insolvent

In the past six months, although the cryptocurrency market has been slumped under the LUNA crash and interest rate hikes, several companies are facing the risk of bankruptcy. In this regard, Sam Bankman-Fried (SBF), a crypto-rich and co-founder of digital asset exchange FTX, warned that , “There will be a wave of cryptocurrency exchange closures in the short term.”

In order to curb the spread of the troubled situation of the cryptocurrency industry, SBF has previously reached out to the lending platform BlockFi and the exchange Voyager Digital, providing hundreds of millions of dollars in credit lines for the two companies. He pointed out at the time that he felt it was his responsibility to step in. Stop the contagion and help industries thrive, “even if it costs me something”.

In a recent interview with Forbes, SBF said that if the market situation can be stabilized, FTX is willing to make some “somewhat bad” investment transactions. As for the previous market rumors that FTX is considering acquiring Robinhood, SBF denied it. .

Although it has done its best to protect the digital asset ecosystem, SBF expects that more cryptocurrency exchanges will fail. He bluntly stated that “some third-tier exchanges are privately insolvent.” He said:

There are companies that have basically fallen into the abyss, and supporting them is impractical because of major gaps in their balance sheets, regulatory issues, or not much business to salvage.

However, SBF declined to disclose the specific exchanges.

SBF later mentioned that FTX has maintained a profitable state for the past 10 quarters. In contrast, its biggest competitor, Coinbase, lost $432 million in the first quarter of this year, and its stock price fell nearly 90% from its all-time high.