Some crypto platforms are already “secretly bankrupt”

Because the cryptos are doing so badly, the crypto platforms are about to go bankrupt and they can no longer pay out.

Sam Bankman-Fried, the 30-year-old billionaire founder of FTX, warns that some crypto exchanges will soon collapse. The question on everyone’s mind in the crypto world is whether we’ve hit the bottom of the market. Since November, nearly $2 trillion in crypto market value has evaporated. This has far-reaching consequences for the platforms on which we trade.

Crypto platforms secretly bankrupt

But the fallout is far from complete. Earlier this month, Singapore-based Three Arrows Capital (3AC), a highly leveraged crypto trading firm with a $200 million exposure to Luna, revealed it was nearly insolvent. This means that it cannot pay.

Three Arrows had borrowed large sums from numerous crypto companies. To survive the Three Arrows default, the companies providing the loan turned to billionaire Sam Bankman-Fried. He is the richest person in crypto, worth about $20.5 billion. Between FTX and his quantitative trading firm Alameda, he provided the companies with $750 million in lines of credit. There is no guarantee that Bankman Fried will recoup its investment. “You know, we’re willing to make a bit of a bad deal here, if that’s what it takes to stabilize things and protect customers,” he says.

bad deal

“We’re willing to make a slightly bad deal here, if that’s what it takes to stabilize things.” Fried has emerged as a savvy capitalist in the beleaguered crypto market, knowing that his own fortune hinges on his healthy recovery and growth.

Bankman Fried has also bought shares in crypto brokerage Robinhood, where FTX has already built up a 7.6% stake, and is rumored to be considering a takeover. All this is related to a growth in the future of cryptos, because then he will earn a huge amount (more).