Sam Bankman-Fried, the Founder of the crypto trading platform FTX, has warned that more crypto exchange failures “are coming,” and has stated: “There are some third-tier exchanges that are already secretly insolvent.”
The exchange chief was speaking to Forbes, and his comments appear to echo sentiments expressed in a report last week from the crypto data specialist Kaiko. The latter warned of pitfalls created by hard-to-understand “webs of relationships” between companies in the industry.
Kaiko added that the fibers linking all these firms were now being put under strain, and that other factors – such as a decline in trading volumes in the bear market – were also taking their toll.
Bankman-Fried also stated:
“There are companies that are basically too far gone and it’s not practical to backstop them for reasons like a substantial hole in the balance sheet, regulatory issues, or that there is not much of a business left to be saved.”
Bankman-Fried refused to name any of the companies...
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