FTX CEO says firm will step in to help “stem contagion’

The last few weeks have spelled nothing but bad news for cryptocurrencies. Amid the brutal price crash, made worse by macro headwinds, has been a spate of negative headlines about crypto. 

Simply, crypto winter has some projects facing collapse or on the verge of biting the dust.

Commenting on the developments, FTX CEO Sam Bankman-Fried said the crypto sector needs to step in to stop any further contagion.

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“I do feel like we have a responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion,” he said. “Even if we weren’t the ones who caused it, or weren’t involved in it. I think that’s what’s healthy for the ecosystem…”

— SBF (@SBF_FTX) June 19, 2022

“I do feel like we have a responsibility to seriously consider stepping in – even if it is at a loss to ourselves – to stem contagion.”

He noted that this was the responsible thing to do, even if they have no involvement in it. “I think that’s what’s healthy for the ecosystem, and I want to do what can help it grow and thrive,” he added in the comments NPR first published on Sunday.

Rescue plans 

UST’s collapse in May heralded a string of liquidity issues for several crypto companies, top among them crypto lender Celsius Network, which froze customer withdrawals amid a liquidity problem.

Then Three Arrows Capital, a Singapore based crypto hedge fund missed margin calls, and late last week, crypto lender Babel Finance also froze withdrawals citing, again, liquidity issues.

Bankman-Fried did not provide specific details on what he or Alameda has in the pipeline. However, his comments come at a time there are various rescue plans underway for these projects, including one for  Celsius announced on Sunday.

Last week, crypto broker Voyager Digital secured a revolving line of credit – $200 million in cash/USDC and 15,000 BTC – from Alameda Research saying the funds will help safeguard its customers’ assets.

In 2021,  FTX came to the aid of Japanese crypto exchange Liquid after it was hacked for $100 million. At the time, Bankman-Fried’s platform extended a $120 million financing deal to Liquid before going on to acquire the exchange.