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Sam Bankman-Fried’s FTX is Reportedly Planning to Acquire a Stake in BlockFi

Summary:

  • The FTX crypto exchange is supposedly in speak to obtain a stake in the crypto-lending platform of BlockFi.
  • Earlier today, FTX offered BlockFi a $250 million credit line to reinforce its balance sheet and platform strength.
  • FTX’s creator and CEO, Sam Bankman-Fried, is now being compared to JP Morgan, who bailed out United States banks in 1907.

The Sam Bankman-Fried-led crypto exchange of FTX is apparently in talk with obtain a stake in the crypto financing platform of BlockFi. According to a report by the Wall Street Journal, conversations in between FTX and BlockFi are continuous without any clear structure of an acquisition arrangement.

FTX Had Earlier today Provided BlockFi with a $250 M Line of Credit.

In addition, news of FTX obtaining a possible take in BlockFi comes less than a week after the exchange extended a $250 million credit line to the latter. BlockFi’s CEO, Zac Prince, discussed through Twitter that the funds would be utilized to offer the business with capital that reinforces the platform’s balance sheet and strength.

Mr. Prince included that the credit center is ‘meant to be contractually subordinated to all customer balances throughout all account types (BIA, BPY & & loan security) and will be utilized as required.’ He likewise mentioned that the group at BlockFi had actually carried out in an excellent way through the continuous market volatility, and the platform was devoted to guaranteeing that customer funds were safe.

Sam Bankman-Fried is the ‘JP Morgan’ of Crypto.

To keep in mind is that Alameda Research, the quantitative research study company established by Sam Bankman-Fried, likewise offered Voyager Digital with $500 million in funding late recently. Voyager Digital later on verified that it had some direct exposure to the just recently insolvent hedge fund of Three Arrows Capital.

Therefore, it can be loosely concluded that Mr. Bankman-Fried is bailing out crypto jobs that have actually been struck hard by the continuous crypto market drawdown. His actions have actually led the crypto neighborhood and even seasoned stock trader Jim Cramer to describe him as the JP Morgan of crypto, as seen in the following tweet.

Sam Bankman-Fried administers line of credit to conserve crypto organizations. He’s the brand-new JP Morgan!

— Jim Cramer (@jimcramer) June 22, 2022

This contrast of Sam Bankman-Fried to JP Morgan has its origins in the panic of 1907, when a craze of bank withdrawals triggered a public mistrust in the banking system. As an outcome, JP Morgan and other Wall Street lenders united to provide their own funds to conserve the United States from a terrible monetary crisis.

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