In a recent interview conducted by Forbes, FTX CEO Sam Bankman-Fried, one of the richest people in the crypto world with an impressive $20.5 billion in assets, explained that in his opinion many exchanges are insolvent even if they hide it.
Of course, Fried speaks knowledgeably about this. The reason is that his FTX platform and also the trading company he owns, Alameda, provide a line of credit of as much as $750 million.
Of course, there are no guarantees that his companies will recover their investments, but Bankman Fried explains:
“You know, we’re willing to do a somewhat bad deal here, if that’s what it takes to sort of stabilize things and protect customers”.
For this reason, Fried explained:
“There are some third-tier exchanges that are already secretly insolvent”.
We are certainly not talking about large tier 1 exchanges like Coinbase, Binance, or Kraken, but secondary platforms. Indeed, there are hundreds and hundreds of crypto exchanges in the world. In its article, Forbes cites over 600 of them, and they are often poorly regulated.
Lots of failed and hacked exchanges
Since the beginnings of the crypto world, there have been dozens and dozens of trading platforms that have failed, for example due to major hacks.
We are obviously talking about Mt Gox, which had failed in 2014 after “losing” 850,000 BTC. Then in 2019 the Japanese Liquid had been hacked, from which over 100 BTC had been stolen.
There are many examples to mention unfortunately, including DragonEx, which lost over $5 million.
FTX in profit for 30 months
Bankman-Fried explains to Forbes that his platform FTX is in profit and has been for as many as 10 quarters, while rival Coinbase is losing as much as $432 million and COIN, its stock, is dropping so much that Goldman Sachs recently suggested selling it.
Moreover, Coinbase is about to lay off more than 1100 people and will close its Pro platform for professional traders.
FTX also talks about Tether
In addition to talking about insolvent crypto exchanges, during the interview, Bankman Fried also talks about Tether, the stablecoin worth over $60 billion.
The CEO of FTX has a positive opinion of USDT and explains that there is no reason to discredit it:
“I think that the really bearish views on Tether are wrong…I don’t think there is any evidence to support them”.
The post FTX: many crypto exchanges are insolvent, according to Sam Bankman-Fried appeared first on The Cryptonomist.
