After splashing money to rescue struggling digital platforms, the CEO of the exchange Sam Bankman-Fried warns some exchanges again will soon fail.

CEO warning: “More exchanges coming soon default"

Branch is going through the hardest time since the 2018 downtrend. Nearly $2 trillion in market value has evaporated since November alone disaster LUNA-UST wiped away hundreds of billions of dollars in a few days. In the first day of this month, crashed to less than $20,000, to the 3-digit mark, the lowest level since December 2020. The market crash has caused a liquidity crisis, pulling many big names in the industry such as or Three Arrows Capital follow.

Magazine Forbes had an interview with the CEO of FTX exchange Sam Bankman-Fried, who is receiving a lot of attention in recent times because of his unexpected "rescue" actions.

The "winds and heavens" moves of Sam Bankman-Fried

Mr. Sam Bankman-Fried said:

"We're willing to make deals against ourselves, if that's necessary to stabilize things and protect our customers."

Investment funds with great influence such as Three Arrows Capital announces imminent default, multiple platforms Other notable liquidity problems are and Babel Finance have halted customer withdrawals. In just 3 days, FTX and its investment fund are issued a BlockFi bailout offer of $250 million and “guaranteed” Voyager Digital through a $485 million loan package. There have even been rumors that FTX is in talks to buy back BlockFi shares.

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The bold moves of the richest billionaire in the crypto industry have completely "reversed the storm", while many other giants have taken turns announcing payroll reductions. Mr. Bankman-Fried has emerged as a "hero" of his time. True to his promise of “willing to spend billions of dollars on acquisitions”, the CEO of FTX splashed a lot of money to acquire the US derivatives exchange LedgerX, the crypto exchange. of Japan or the game developer Good Luck Games, 7.6% shares of Robinhood, the platform is rumored to "return to" FTX, but recently Bankman Fried has denied.

In the opposite direction, the CEO of the exchange Changpeng Zhao revealed that he has also received many “rescue” offers from struggling crypto companies, but stated that not everyone deserves to be saved because in essence, the operating model of the project has failed. fail and are no longer relevant to the market.

There are a number of third-tier exchanges that have "secretly" defaulted

Share with Forbes, "Curly" Sam stated:

“There are a number of third-tier crypto exchanges that have secretly defaulted.”

FTX with , and are giants among digital asset exchanges. They have millions of customer accounts and functionally they operate similarly to an online stockbroker. However, apart from these whales, there exist more than 600 crypto exchanges around the world in a largely unregulated border. Have you heard of AAX, Billance and Hotbit? They also offer the , Ether, … and generous margin loans 20 times the initial capital for customers. Any loophole in terms of regulatory oversight can turn customers into easy prey for scams or attacks.

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Japanese exchange Coincheck has been hacked $530 million in 2018, of Singapore lost $275 million in 2020 and then in December 2021, Cayman Island-based BitMart was robbed of $200 million. Back in 2016, Bitifinex was hacked and took away almost 120,000 , worth $2.5 billion now.

However, even Sam Bankman-Fried can't be generous or willing to splash the bailout money forever. He tactfully remained anonymous and said:

“There are companies that have basically gone too far and cannot be saved because of significant holes in their balance sheets, legal problems, or no business hope to turn the situation around. "

The CEO of FTX is worried that there will be more failures because during the previous euphoria, exchanges were constantly offering customers with extremely generous deposit yields. BlockFi or Voyager has promised up to 12% interest to customers per year. These numbers would only be ideal if the market never went into a downtrend, and now it looks miserable.

Despite the widespread downturn, Mr. Sam insists that FTX is still profitable and has been operating for the past 10 quarters. FTX's biggest rival is lost $432 million in the first quarter of 2022, its stock has fallen nearly 90% from its all-time high and was forced to part ways with 1,100 employees.

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Bankman-Fried also has an eye on cryptocurrency miners, many of which have rapidly scaled up and capitalized on this 21st-century digital gold rush. Shares of publicly traded cryptocurrency miners including Marathon Digital Holdings and Riot has also plummeted more than 60% up to now.

Tether (USDT) Not Worrying

About the bad news surrounding copper The largest cryptocurrency market is (), Mr. Sam Bankman-Fried said:

“I think the negative views about are untrue and do not have any facts to back them up.”

Many industry watchers seem to have been watching this all the time Tether a suspicious ticking time bomb, backed by uncertainty, and will soon become the next threat to the entire market. Being "tested by fire" from the collapse of the ecosystem lost the 1 USD mark and was massively withdrawn by users. However, Tether successfully processed withdrawal requests and has since recovered. However, according to the latest revelations of Tether CTO, USDT is being shorted by many large funds.

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