The FTX CEO said helping bail out crypto miners might help mitigate the credit contagion in the crypto sector.
FTX co-founder and CEO Sam-Bankman Fried is open to acquisitions of troubled crypto miners in order to help stem contagion in the crypto industry, he told Bloomberg in an interview Friday.
- “When we think about the mining industry, they do play a little bit of role in the possible contagion spread, to the extent that there are miners that were collateralizing borrows with their mining rigs,” Bankman-Fried said. “There might come along a really compelling opportunity for us – I definitely don’t want to discount that possibility.”
- To be sure, Bankman-Fried tweeted that he wasn’t “particularly looking at miners, but sure, happy to have conversations with any companies,” following the publication of the story.
- Private and publicly listed crypto miners are facing margin calls and defaults after having racked up debts anywhere between $2 billion to $4 billion to finance the construction of their gargantuan facilities across North America, according to data compiled by CoinDesk and industry participants.
- FTX just announced on Friday that it had made a deal with crypto lender BlockFi to provide BlockFi with a $400 million credit facility and potentially acquire it for as much as $240 million. And Alameda Research, which is owned by Bankman-Fried, had previously extended a cash/USDC loan of $200 million and a revolving credit facility for 15,000 bitcoin ($294 million) to beleaguered crypto exchange Voyager Digital.
- Shares of many publicly-traded mining companies are down by 75% or more year to date.
UPDATE (July 1, 21:54 UTC): Added Bankman-Fried’s tweet in second bullet point.