In a brutal bear market where multiple crypto executives have stepped down, Sam Bankman-Fried has stepped up to rescue troubled companies.
Will Celsius be its next acquisition?
After acquiring the assets held by Voyager Digital, the crypto exchange FTX and its leading figure Sam Bankman-Fried seem to move forward to save struggling companies, this time with Celsius.
More Acquisitions May be Coming
According to a source familiar with the SBF’s deal-making, the leading cryptocurrency exchange is in the process of bidding on the troubled crypto lender’s assets.
Celsius, the well-known crypto lending platform in the series of Terra’s collapse, filed for bankruptcy in July after a false attempt to survive the liquidation crisis. FTX’s approach could be a lifeline for the company.
Although no official statement has been made, it is already known that Celsius has received other bidding offers, including Ripple, according to Reuters’ August report.
The objective is to help the firm finance a restructuring, which includes avoiding a definitive liquidation and being able to reimburse at least some of its customers, whose assets are still blocked.
The news surfaced the same day that Celsius Network CEO Alex Mashinsky announced his resignation.
“I regret that my continued role as CEO has become an increasing distraction, and I am very sorry about the difficult financial circumstances members of our community are facing.”
A Buyers Market
Sam Bankman-Fried is reportedly considering making a bid for Celsius’s assets. This is indeed a surprise move because just a day ago, FTX won an auction to acquire the assets of now-defunct crypto brokerage firm Voyager Digital in a deal worth about $ 1.4 billion.
The exchange said that it still has $1 billion to spend on acquisitions.
If Sam’s intent is real, it’s possible that the auction of the company’s assets will take place soon in the near future since Celsius is running out of operating fun in October 2022.
On the other hand, it is worth noting that not only FTX is interested in this deal, but there is a high probability of the participation of Ripple – the representative has also considered buying Celsius assets to expand the company’s position.
However, Ripple has yet to make any additional comments. If the aforementioned idea holds true, we will witness another fascinating race between the cryptocurrency industry’s behemoths, such as FTX and Binance, in Voyager’s auction.
In the aftermath of the cryptocurrency market crisis, FTX CEO Sam Bankman-Fried gathered assets at rock-bottom prices, claiming that there is still cash to buy if the opportunity arises.
Huge Hits Across The Market
Coinbase, FTX’s primary competitor, saw its share price fall by 70% and lay off employees as a result of the cryptocurrency market meltdown. However, FTX is developing as a standout in this space.
The 30-year-old billionaire attributed his success to a large cash reserve, low overhead costs, avoiding financing, and the ability to easily convert to a private corporation.
The cryptocurrency industry has lost billions of dollars in recent months, beginning with the Terra USD meltdown, the failure of crypto hedge funds such as Three Arrow Capitals, and the bleak macroeconomic environment. The next domino to fall will be those who lend to Three Arrows.
After receiving a $250 million line of credit, FTX inked an agreement in July that provided them the option to buy BlockFi to pay the lender. FTX also spent $500 million on Voyager Digital, which went bankrupt later on. Furthermore, FTX is in talks to acquire the South Korean cryptocurrency exchange Bithumb.
Bankman-Fried’s recent cryptocurrency actions have been compared to billionaire Warren Buffett’s 2008 investment strategy.
With a $5 billion investment in Goldman Sachs, Berkshire Hathaway’s Chairman and CEO avoided losses during the global financial crisis. Profits from the investment totaled $3 billion for the company.
Some refer to him as a superhero, while others refer to him as a cunning opportunist. Nonetheless, his decision surprised the entire industry, especially since other crypto giants worth billions of dollars have declared bankruptcy this year.