During the present market-crash, Sam Bankman-Fried’s (SBF) Alameda Research is “stepping in” to prevent additional contagion across the crypto sector.
As a result of the dramatic market collapse in 2022, a number of crypto firms are experiencing liquidity challenges (of varied severity). Major companies such as Celsius and Three Arrows Capital (3AC) are apparently on the verge of going bankrupt, and if they do, they could bring others down with them.
SBF indicated in an interview that he believes his companies, Alameda and FTX, “have a responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion.”
“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, and I want to do what can help it grow and thrive.”
SBF added that his companies have done this “a number of times in the past,” He cited FTX contributing $120 million in funding to Japanese crypto exchange Liquid last year, up from $100 million in August.
Notably, immediately after providing Liquid with cash, FTX announced to acquire the company, and the deal was apparently completed in March this year.
“We, I think about 24 hours later, stepped in and gave them a pretty broad line of credit to be able to cover all of their demands, to make sure customers were made whole while thinking about the longer-term solution,” he said.
However, on Saturday, crypto brokerage Voyager Digital said that Alameda has agreed to provide it with a $200 million USD Coin (USDC) loan as well as a “revolving line of credit” of 15,000 Bitcoin (BTC) worth $298.9 million at current prices.
Alameda’s credit facilities given by Voyager Digital will each expire on December 31, 2024, with an annual interest rate of 5% due on maturity, according to Voyager Digital.
In the face of high market volatility, the company declared that it will only use the credit lines “if needed to safeguard customer assets.”
“The proceeds of the credit facility are intended to be used to safeguard customer assets in light of current market volatility and only if such use is needed,” the firm stated.
While SBF has stated that it wants to help struggling crypto firms, there have been conflicting reports this month that Alameda was involved in the recent volatility of Celsius.
The rumours were sent to SBF via Twitter on Monday, and they were totally debunked, stating that:
“lol this is definitely false. We want to help those we can in the ecosystem, and have no interest in hurting them — that just hurts us and the whole ecosystem.”
