FTX Calls for Funding Following Multiple Acquisitions
- FTX has come to the rescue of multiple crypto projects amid the ongoing market collapse.
Cryptocurrency exchange, FTX, and its American counterpart FTX US are said to have separately set new fundraising goals after arranging a number of prominent acquisitions and credit lines for businesses. Sam Bankman-Fried, the co-founder of FTX, reportedly considered obtaining funds equal to that of a January investment round, in which the company completed a $400 million round, valuing it at $32 billion. Similar objectives were also outlined by FTX US, which raised $400 million in January to value itself at $8 billion.
According to reports, Bankman-Fried has invested close to $1 billion in acquisitions and financial support for cryptocurrency companies through Alameda and FTX.
FTX has remained busy during this crypto downtime acquiring crypto firms that have been hit hard by the bear market. The US subsidiary of the crypto exchange, FTX US previously outlined plans to acquire Embed Financial Technologies in a bid to enhance the business’s stock offering. Later on, FTX US and BlockFi agreed to a $400 million revolving credit facility, which opened the path for the cryptocurrency exchange to acquire the cryptocurrency lending company.
FTX itself has stayed active during the recent market slump and has also ventured into making new purchases. The popular crypto exchange announced in June that it had reached a deal to buy the Canadian cryptocurrency platform Bitvo, adding it was exploring the possibility of purchasing Robinhood. Bankman-Fried at the time stated that his companies had a duty to evaluate the condition and intervene if necessary, to avert a crash.
In contrast to many other cryptocurrency exchanges, FTX has remained firm on its decision not to enforce a hiring freeze. Bankman-Fried’s multiple helping hands to challenged crypto exchanges have made him a cryptocurrency lender of last resort. Anthony Scaramucci dubbed him “the new John Pierpont Morgan”, whose rescues of the US banking system more than a century ago contributed to the creation of the Federal Reserve.
Is FTX’s Bankman-Fried Crypto’s Saviour?
This year wouldn’t be the first time Bankman-Fried has saved the day for crypto firms. FTX came to the rescue of Japanese cryptocurrency exchange, Liquid Group with a $120 million loan in August last year after the platform was hit by a $100 million hack.
At a time when digital assets are in rapid decline, Bankman-Fried has essentially become the crypto market’s equivalent of a central banker. Analysts predict that he won’t be the only billionaire in the future as a result of the cryptocurrency market’s ongoing volatility.
Although Bankman-Fried is the most notable of the recent crypto saviors, he is not the only one rescuing challenged crypto projects. Changpeng Zhao, the founder, and CEO of Binance has also played a role as the industry’s savior. Binance spearheaded a$150 million funding effort for Sky Mavis, the company behind the play-to-earn game Axie Infinity, which was hacked for $625 million.
He also made general observations last month on crypto bailouts. Considering Binance’s significant financial reserves, Zhao stated in a blog post that the crypto exchange has an obligation to help industry participants survive and ideally prosper.
Undoubtedly, not all of these rescues are done with pure altruism. Bankman-Fried and Zhao, who are in charge of major cryptocurrency exchanges, have a stake in keeping the market from collapsing.