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FTX CEO backs Tether, says some exchanges are “secretely insolvent”

29 Jun 2022 : 11:39
2 min read
  • FTX CEO Sam Bankman-Fried believes that many crypto firms are "secretly insolvent"
  • FTX recently bailed out BlockFi and Voyager Digital
  • SBF also supported Tether and its stablecoins

FTX founder and CEO Sam Bankman-Fried (popularly called SBF in the world of crypto) gave an insight into the current situation of the crypto market. In an interview with Forbes, he also came out in support of Tether, the issuer of the biggest stablecoin in the crypto market.

FTX boss’ generous streak

FTX had recently bailed out BlockFi and helped the firm bolster its balance sheet and regain its strength with a $250 million credit line. On the other hand, the exchange had also helped Voyager Digital, a crypto exchange, by providing a $500 million in financing to the firm last week via the founder’s quantitative trading firm Almeda.

While it is not sure that FTX will be able to recoup the investments and if helping the firm will pay off in the long term, SBF commented that his firm is “willing to do a bit of a bad deal here if it takes that to somehow stabilize things.”

“Secretly insolvent?”

However, he hinted that many exchanges wouldn’t make it out of the current bearish situation, adding that apart from the major ones, plenty of exchanges operate outside regulations and do not comply with KYC rules. The founder of FTX added that many of the firms providing services related to crypto are “secretly insolvent.”

“There are companies that are fundamentally too far gone, and it’s not practical to bail them out for reasons like a significant hole in the balance sheet, regulatory issues, or because there’s not much of a business left to salvage,” said the FTX CEO.

Despite the bearish view on crypto exchanges, SBF went on to support Tether, stating that the firm can be trusted. In the light of many stablecoin issuers receiving heat from the crypto community, Tether’s lack of transparency has invited criticism. “I think the truly bearish views on Tether are wrong… I don’t think there’s any evidence to support them,” Bankman-Fried added.  


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