SBF and Alameda step in to prevent cryptocurrency crash from spreading

Sam Bankman-Fried (SBF)'s Alameda Research is "stepping in" to prevent the collapse of some crypto companies from spreading further across the crypto industry in the current bear market.

Due to the strong downturn in the market throughout 2022, many crypto companies are facing liquidity issues (to varying degrees). Large firms like Celsius and Three Arrows Capital (3AC) are reportedly on the brink of bankruptcy, and their failures could drag others down as well.

In a June 19 interview with NPR, SBF said that given the status of his companies Alameda and FTX, he believes they have a "responsibility to seriously consider stepping in to stop the collapse from spreading, even if we lose money as a result." .”

"Even if we're not the culprit, or not involved. I think our involvement is healthy for the ecosystem, and I want to do something that helps it grow and thrive."

SBF added that his company has done so "many times in the past". He noted that FTX provided Japanese cryptocurrency exchange Liquid with $120 million in funding last year, and $100 million in August. Notably, FTX announced plans to acquire the company shortly after providing funding to Liquid, and the deal was reportedly closed in March of this year.

"We stepped in about 24 hours later and gave them a fairly broad line of credit to meet all their requirements and ensure the customer was covered while looking at a long-term solution," he said.

Most recently, cryptocurrency brokerage Voyager Digital announced on June 18 that Alameda had agreed to provide the company with a USDC loan of $200 million and a “revolving line of credit” of 15,000 Bitcoin (BTC), worth $2.989 at current prices. One hundred million U.S. dollars.

Voyager Digital pointed out that the credit facility provided by Alameda will expire on December 31, 2024, and the annual interest rate at maturity will be 5%. The company said it would only draw on the line of credit "if it is necessary to protect client assets" amid high market volatility.

"Given the current market volatility, proceeds from the credit facility will be used to safeguard client assets and will only be used when required," the company said.

While the SBF has expressed good intentions to help struggling crypto companies, conflicting rumors have surfaced this month that the recent instability in Celsius has been linked to Alameda.

Analysts such as "PlanC" suggested to their 145,300 followers on Twitter last week that Alameda dumped 50,000 stETH earlier this month to get rid of its price peg to ETH and jeopardize Celsius' large holdings of stETH because This will prevent Celsius from exchanging assets for an equivalent amount of ETH.

After the rumor was retweeted to SBF on June 20, they completely denied it, stating:

“Haha, this is absolutely false. We want to help the people in the ecosystem that we can help and have no intention of hurting them — that would only hurt us and the entire ecosystem.”