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Sam Bankman-Fried, the billionaire founder and Chief Executive Officer of FTX Derivatives Exchange has come to set the records straight about claims that the trading platform has eyes on bailing out distressed crypto miners.
The rumors that the exchange was contemplating making this move came from an interview Sam Bankman-Fried had with Bloomberg last Friday, noting amongst all things that the trading platform will not discount the compelling opportunities that may abound in the crypto mining world.
“There might come along a really compelling opportunity for us – I definitely don’t want to discount that possibility.”
In his clarifications later on, Bankman-Fried said that the quote being misconstrued was that they “aren’t really looking into the space.”
While clarifying on Twitter, the iconic crypto veteran said he is not particularly looking at miners right now, but that he will be looking at maintaining conversations with all companies without restriction.
With the cryptocurrency ecosystem recording an unprecedented price slump, the mining industry is being adversely affected. According to data gleaned from Bitinfocharts, Mining profitability, which is a measure of daily dollars per terahashes per second, has reached lows not seen since October 2020.
At the time of writing, the mining probability is currently pegged at $0.0852 per day for 1Th/s, down more than 81% from the high of $0.464 attained back in 2021. With this declining figure, miners are typically unable to keep up with the expensive costs of maintaining their mining farms, a move that is forcing premature sell-offs of mined Bitcoin.
According to Arcane Research, the majority of miners sold 100% of the Bitcoin they mined in May as a way to cover up operating costs and to pay interests on outstanding debt and credit facilities.
Industry-Wide Bailout: How Is Sam Bankman-Fried Featured?
The mining industry is just one of the offshoots of the digital currency ecosystem that is reeling from the onslaught in the industry at this time. Large and by, the crypto lending platforms and hedge funds are also notably distressed that a court in the British Virgin Islands had to order the liquidation of Three Arrows Capital.
Celsius Network and Babel Finance also paused withdrawals early last month and amidst all of these uncertainties, platforms like BlockFi have been drawing interest from investors to help it survive the current hardship.
One of the biggest platforms in the space with enough capital base, FTX, through Sam Bankman-Fried’s leadership has extended a $250 million credit facility to BlockFi as it is also looking at an acquisition deal with the crypto lender. The firm tried to bail out Celsius Network which is on the brink of filing for bankruptcy but reportedly backed out when it saw complications in the firm’s balance sheet.
The role FTX is playing accounts for why many might have taken his words at the Bloomberg interview out of context.