• Sam Bankman-Fried recently bailed out BlockFi and Voyager Digital
  • He claims that the majority of exchanges are "secretly insolvent"
  • The billionaire also came in support of Tether

FTX founder and CEO Sam Bankman-Fried, popularly known as SBF in the crypto world, said in an interview with Forbes that many crypto exchanges are "secretly insolvent" and added that they have fallen beyond redemption.

Bankman-Fried has been actively investing in several firms and helping them get over insolvency issues. Crypto lender BlockFi's CEO Zac Prince recently confirmed that it had signed a term sheet with FTX to secure a $250 million revolving credit facility which will help the firm bolster its "balance sheet and platform strength."

Additionally, FTX founder's quantitative trading firm Almeda bailed out another digital asset exchange Voyager Digita last week by committing $500 million in financing to the firm. On the contrary, Voyager Digital lost the $670 million loan it had provided to crypto hedge fund Three Arrows Capital after the latter defaulted on the loan, as per CNBC. However, this doesn't affect the firm's deal with Almeda.

Despite helping out exchanges in difficult times, it is unclear if the billionaire will be able to recoup his investment.

“We’re willing to do a bit of a bad deal here if it takes that to somehow stabilize things," the FTX CEO told Forbes.

SBF also added that many other exchanges will face similar issues amid the unstable market, adding that "there are some third-party exchanges that are already secretly insolvent."

Barring a few major crypto exchanges, there are hundreds of more exchanges that might not last. These exchanges like Billance, Hotbit, and more operate outside regulatory clearance with low to no KYC checks.

“There are companies that are fundamentally too far gone and it’s not practical to bail them out for reasons like a significant hole in the balance sheet, regulatory issues, or because there’s not much of a business left to salvage,” Bankman-Fried said.

He also supported Tether, the firm behind the biggest stablecoin in the crypto space, USDT. There have been concerns regarding USDT's reserves in the past.

“I think the truly bearish views on Tether are wrong… I don’t think there’s any evidence to support them," Bankman-Fried added.

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