Alameda Research team of Sam Bankman-Fried’s (SBF) are “stepping in” to prevent further contagion across the crypto sector during the current bearish market.
As a result of the strong market turmoil throughout 2022, numerous crypto companies are facing liquidity issues. Some of the few examples are major firms such as Celsius and Three Arrows Capital (3AC) who are both reportedly on the brink of insolvency and could potentially pull others down with them if they were to collapse.
In an interview with NPR on Sunday, CEO of SBF stated that given the stature of his companies, Alameda and FTX, he believes they “have a responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion:”
“Even if we weren’t the ones who caused it, or weren’t involved in it. I think that’s what’s healthy for the ecosystem, and I want to do what can help it grow and thrive.”
FTX providing Japanese crypto exchange Liquid with $120 million in financing last year after it was $100 million in August, whose SBF’s company has done this “a number of times in the past”. Besides that, FTX announced plans to acquire Liquid shortly after providing it with funding, and the deal reportedly closed in March this year.
“We, I think about 24 hours later, stepped in and gave them a pretty broad line of credit to be able to cover all of their demands, to make sure customers were made whole while thinking about the longer-term solution,” he said.
On Saturday, crypto brokerage Voyager Digital announced that Alameda had agreed to give the company a 200 million USD Coin (USDC) loan and a “revolving line of credit” of 15,000 Bitcoin (BTC) worth $298.9 million at current prices.
Credit facilities offered by Alameda to Voyager Digital will each expire on December 31, 2024, and have an annual interest rate of 5% payable on maturity. Voyager Digita stated it will only use the credit lines “if needed to safeguard customer assets” amid severe market volatility.
“The proceeds of the credit facility are intended to be used to safeguard customer assets in light of current market volatility and only if such use is needed,” the firm stated.
Contradictory rumors surfaced this month that Alameda played a part in the recent instability of Celsius, although SBF has outlined good intentions to help suffering crypto companies.
According to analysts such as PlanC whom suggested on Twitter to their 145,300 followers last week that Alameda conducted a 50,000 staked Ether (stETH) sell-off earlier this month in a bid to depeg its price from Ether (ETH). This in return has jeopardized a large stETH position held by Celsius, as it has prevented the company from exchanging the asset for the equivalent amount of ETH.
SBF completely rejected the claims, after the rumors would put forward to them via Twitter on Monday, stating that:
“lol this is definitely false. We want to help those we can in the ecosystem, and have no interest in hurting them — that just hurts us and the whole ecosystem.”
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