Billionaire Sam Bankman-Fried is countering rumors that his crypto empire is relying on a balance sheet dominated by FTX Token (FTT).
A purported balance sheet from Alameda Research spurred speculation that Bankman-Fried’s business relies too heavily on FTT, suggesting that the company could spiral if the value of FTT plummets.
Alameda Research is the digital asset trading firm Bankman-Fried founded while FTT is the native token of FTX, a crypto exchange that is part of the billionaire’s empire.
Bankman-Fried used to also serve as chief executive of Alameda but in August 2021 promoted traders Caroline Ellison and Sam Trabucco to serve as co-CEOs so he could focus on FTX. Trabucco stepped down from his role this past August, leaving Ellison as the sole head of the firm.
Bankman-Fried calls the rumors unfounded.
“FTX has enough to cover all client holdings. We don’t invest client assets (even in treasuries). We have been processing all withdrawals, and will continue to be…
It’s heavily regulated, even when that slows us down. We have GAAP audits, with > $1b excess cash. We have a long history of safeguarding client assets, and that remains true today.”
Bankman-Fried also shared a response from Ellison on his balance sheet.
Explains Ellison,
“A few notes on the balance sheet info that has been circulating recently:
– that specific balance sheet is for a subset of our corporate entities, we have > $10 billion of assets that aren’t reflected there
– the balance sheet breaks out a few of our biggest long positions; we obviously have hedges that aren’t listed
– given the tightening in the crypto credit space this year, we’ve returned most of our loans by now.”
FTT is trading at $17.96 at time of writing and is down nearly 20% in the past 24 hours.
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The post Billionaire Sam Bankman-Fried Counters Speculation That His Crypto Empire Could Become Insolvent appeared first on The Daily Hodl.
