SBF Ditched Celsius Deal Over $2bn Loss, Report Says

  • FTX reportedly walked away from a deal to buy troubled crypto lender Celsius over the state of its balance sheet.
  • The exchange’s founder Sam Bankman-Fried has positioned himself as crypto’s “lender of last resort” as the industry suffers a liquidity crunch.
  • Celsius filed for bankruptcy this week after freezing all its customers’ accounts in June.

Sam Bankman-Fried has emerged as the “lender of last resort” of the crypto world, as companies in the sector weather a major


liquidity

crisis.

The FTX chief executive provided the struggling lending firm BlockFi with a $250 million loan last month, and also attempted to bail out the Voyager Digital exchange before it declared bankruptcy this week.

BlockFi, Voyager, and other major crypto firms have struggled to repay bitcoin-backed loans as digital asset prices have plunged and Bankman-Fried has propped up the industry to a large extent.

It’s led some to compare the crypto billionaire to Warren Buffett, who bailed out Goldman Sachs during the 2008 financial crisis, or the banker J.P. Morgan, who built his influence by bailing out several major New York banks in 1907.

“Sam Bankman-Fried is the new John Pierpont Morgan,” SkyBridge Capital founder Anthony Scaramucci said last month. “He is bailing out cryptocurrency markets the way the original J.P. Morgan did after the crisis of 1907.”

But even Bankman-Fried couldn’t justify bailing out Celsius Network, according to the Financial Times.

The failed lending firm, which filed for Chapter 11 bankruptcy this week, had a $2 billion hole in its balance sheet, which sources told the FT had led to FTX abandoning a potential bailout deal.

In June, Celsius froze all customers’ accounts as it struggled to cope with an ongoing crypto market crash. It was around that time that FTX decided not to offer them a loan, the FT said.

Celsius’ founder Alex Mashinsky said in a statement the firm’s Chapter 11 bankruptcy would lead to a restructuring process.

“I am confident that when we look back at the history of Celsius, we will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company,” he said.

But it would appear that even Bankman-Fried doesn’t hold such a rosy outlook on the crypto lending firm’s future.

Read more: FTX founder Sam Bankman-Fried gets by on 4 hours’ sleep and multitasks on 6 screens. Insiders break down what the 29-year-old crypto billionaire is really like — and the tough questions facing his company.

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