SBF and Alameda step in to prevent cryptocurrency collapse from spreading

Sam Bankman-Fried (SBF)’s Alameda Research is “stepping in” to prevent further contagion throughout the crypto industry during the current bear market.

Many cryptocurrency companies are facing liquidity problems (of varying severity) due to a strong market downturn throughout 2022.Major companies such as Celsius and Three Arrows Capital (3AC) are reportedly on the brink of bankruptcy, and may disappoint others If they collapse, stay with them.

In an interview with NPR on June 19, SBF said, given Given the standing of his companies, Alameda and FTX, he believes they “have a responsibility to seriously consider stepping in to stop the contagion even if we’re overwhelmed ourselves.”

“Even if we’re not the ones who caused it, or aren’t involved in it. I think it’s healthy for the ecosystem, and I want to do things that help it grow and thrive.”

SBF added that his company has done this “many times in the past” as he pointed out that FTX provides Japanese cryptocurrency exchange Liquid $120 million in financing It reached $100 million last August.Notably, FTX announced plans to acquire Liquid shortly after funding it, a deal reportedly closure March this year.

“I think after about 24 hours, we stepped in and gave them a fairly broad line of credit to be able to cover all their needs to make sure the client had a complete solution when they were looking at a long-term solution,” he said.

Recently, however, crypto brokerage firm Voyager Digital Announce On June 18, Alameda agreed to provide the company with a $200 million loan and a “revolving line of credit” of 15,000 bitcoins (BTC), worth $298.9 million at current prices.

Voyager Digital noted that the lines of credit offered by Alameda will each expire on December 31, 2024, and will pay an annual interest rate of 5% at maturity. The company said it would only use the line of credit “where necessary to protect client assets” amid wild market volatility.

“Given the current market volatility, proceeds from the credit facility are intended to be used to protect client assets and are only used when needed,” the company said.

related: Celsius recovery plan proposed in community-led short-term squeeze attempt

While the SBF outlined good intentions to help suffering crypto companies, conflicting rumors emerged this month that Alameda played a role in the recent Celsius instability.

Analysts such as “PlanC” Suggest Last week, their 145,300 followers on Twitter said that Alameda sold 50,000 stETH earlier this month in hopes of Decoupling its price from ETH And jeopardize Celsius’ large stETH position, as this would prevent the company from exchanging assets for an equivalent amount of ETH.

After rumors were raised to the SBF via Twitter on June 20, they rejected the claims outright, stating:

“Haha, this is absolutely fake. We want to help those within our ecosystem and have no intention of harming them – it will only harm us and the ecosystem as a whole.”