Sam Bankman-Fried saves BlockFi and Voyager

Sam Bankman-Fried, the co-founder of crypto exchange FTX and quantitative trading firm Alameda, has emerged as something of a savior for the crypto market.

Bankman-Fried’s two companies have agreed to provide $500 million in financing to Voyager Digital and $250 million in credit facilities to BlockFi — both struggling crypto startups looking for lifelines.

BlockFi, which provides loans against cryptocurrency collateral, has been struggling to pay back its debts after the markets crashed earlier this year. The company is also facing regulatory uncertainty over whether it can continue offering its services in New York state.

Voyager Digital, which offers brokerage services for investors who want to trade on their own behalf, also faces liquidity problems due to the wider market crash.

The founder of FTX, has emerged as a savior for the $900 billion crypto market as it faces a deepening liquidity crunch.

FTX, Bankman-Fried’s crypto exchange, agreed to provide crypto lender BlockFi with a $250 million revolving credit facility. Alameda, Bankman-Fried’s quantitative trading firm, committed $500 million in financing to Voyager Digital, a crypto brokerage.

Bankman-Fried has been busy making deals in recent weeks as companies struggle to raise money. BlockFi said it would use the proceeds from its deal with FTX to fund loans and other forms of financing for cryptocurrency investors.

According to Forbes, Bankman-Fried has an estimated net worth of $20.5 billion in cryptocurrency. At the beginning of 2022, his cryptocurrency exchange FTX had a $32 billion value.

As the $900 billion crypto market continues to confront a widening liquidity shortage, the 30-year-old has emerged as something of a rescuer. At NPR, Bankman-Fried said he felt the “obligation to seriously consider stepping in, even if it is at our loss to stop the epidemic” that his interaction has created.

Due to a lack of regulation, enterprises in the crypto sector are unable to appeal to the federal government for a bailout should things go south, which is a stark contrast to the banking industry of 2008 when things went south.