The crypto market is currently being pushed into a negative trend by difficulties and projects in bankruptcy. The head of the crypto exchange FTX, Sam Banksmanager-Fried, sees the industry as having a responsibility to respond with relief measures.
Fear is spreading among investors in Bitcoin (BTC) and the company: At least since the collapse of the Terra ecosystem in the second week of May, bad news has been piling up, for example from the DeFi platform Celsius or the hedge fund Three Arrows. Capital (3AC), which is on the brink of bankruptcy, appears to be standing. The price curves of Bitcoin, Ethereum (ETH) and other major altcoins have returned to the levels seen at the turn of 2020/21. In this situation, Sam Bankman-Fried, CEO of the crypto exchange FTX, is committed to financially supporting ailing projects. Bankman-Fried told US Radio he felt compelled to think about how interference from the crypto industry “could prevent infection.”
Additionally, the 30-year-old billionaire explained that his plans aren’t about whether they’re to blame for recent bankruptcies and bankruptcies. He pleaded for relief measures to get crypto markets back on an overall “healthy” path. Banksman-Fried is committed to “effective philanthropy” and seeks to achieve social reform elsewhere through effective charity.
BlockFi receives a $250 million loan from FTX
Following interviews with NPR, news broke that its crypto exchange FTX is lending $250 million to struggling platform BlockFi. BlockFi CEO Tsar Prince expressed his relief at the emergency financial aid on Twitter. On the other hand, Bankman-Fried tweeted that BlockFi can now move from a strong position into a difficult market. More than a week ago, BlockFi announced it would cut 20 percent of its jobs in response to the market environment.
Banksman-Fried was becoming fundamental on other issues these days as well. He sees the US Federal Reserve as one of the triggers for the decline in cryptocurrency prices. The Fed recently hiked US interest rates by 0.75 percent, the most since 1994. According to Bankman-Fried, as fiscal tightening occurs, investors sell higher-risk assets. In the 3AC hedge fund drama, in a Twitter discussion, Bankman-Fried wished for future regulation and/or transparent DeFi as a measure to prevent a recurrence. FTX is one of the top five cryptocurrency exchanges in the world, and Bankman-Fried has a long history of speaking out.
Conclusion: crypto industry in self-responsibility?
Prominent voices like Bankman-Fried are usually in an internal conflict: On the one hand, they want state influence and regulation of the crypto industry with a sense of proportion, on the other hand, they no longer act in a separate space. . world economy and politics. The call for personal responsibility can show a way that leads to a new balance. For example, remember the $600 million hack in Axi Infinity (AXS) and sidechain Ronin, where a consortium provided millions to the world’s largest crypto exchange Binance in April to fully compensate victims. Here, too, transition risks were identified for corresponding projects and the funds used will, at best, pay off for Binance in the medium term. For now, it remains to be seen whether Bankman-Fried’s call will find support in the crypto industry and enable concrete action. However, even profitable crypto exchanges like Terra (LUNA) and UST failed to make up for the $40 billion crash.