FTX CEO Sam Bankman-Fried accepted an exclusive interview with CNN a few days ago, talking about the recent developments in the encryption market and FTX's own expansion plans. The host Julia Chatterley even jokingly asked whether SBF would acquire Coinbase. What did the two sides talk about in this interview?

first level title

Liquidation is painful, but long-term is healthy

Julia Chatterley started by asking about the current state of the crypto market:

I think that although it is painful and challenging for the encryption industry now, don’t you also see a certain degree of “health”?

SBF believes that the crypto market is developing towards a healthy situation. Over the past two years, some institutions and capital have developed excessively. Now the market is liquidating these excessive leverage and weeding out companies with capital adequacy problems.

At a certain point, you start to see that even the well-capitalized players are having trouble, and I don't think the market is healthy anymore.

Now the market is liquidating these excessive leverage, washing out some players with problematic balance sheets, and I think this is healthy for the market to some extent.

the interviewthe interviewalso expressed similar views.

first level title

What are the criteria for aiding crypto companies?

Recently, the lending platform BlockFi has obtained FTX's US$250 million revolving credit line, and SBF has previously expressed its willingness to lend money to other companies, setting a stop loss line for this liquidation crisis.

In response, Julia Chatterley asked:

Dare I say it, every day now someone knocks on your door and yells, "Hey, are you going to invest in us?"

So you have to pick out the weak, unprofitable, or even insolvent companies from these companies, right?

SBF said noncommittally that lending money to these companies is not doing charity, so it must be carefully evaluated.

And FTX's criteria is to look for companies that "do business well." These companies only have temporary liquidity problems, so as long as some loans are provided, users of these companies can be protected and systemic crises can be prevented in advance.

You hit the nail on the head, this (picking companies) is really what we are doing, that is, lending money to these companies is not just a bailout. Some of the companies we studied were destined to go bankrupt, and it was right for them to declare bankruptcy.

The key to our selection of companies is those companies with good business performance. Because these loans are only a way to provide them with liquidity in the short to medium term.

At the same time, SBF also clarified some market rumors. It said that in addition to the good health of the company, the most important thing is to protect the users of these good companies, so the mining machine/mining industry is not considered by FTX.

Rumors of FTX bailing out miners have been fueled a lot lately, which is understandable since this is one of the major industries in the crypto space.

first level title

Will you take advantage of the low point to buy other companies? Like Coinbase?

According to SECOfficial documents, SBF bought 56 ​​million Robinhood shares in May, making it the company's third-largest shareholder. Although SBF denies that FTX has acquisition intentions, it is unavoidable to arouse people's imagination.

SBF clarifies that this is purely an investment. He has great respect for Robinhood founder Vlad Tenev and the entire team, and has not had any active discussions on the acquisition issue, but does not deny that there will be other opportunities.

Julia Chatterley argues that it makes sense to buy shares at low points and asks:

Everyone is very interested in your investment in Robinhood. Do you have other objects you want to invest in?

Maybe we can also bring (investment) Coinbase into the discussion?

SBF immediately laughed and denied buying Coinbase.

He pointed out that the current operating conditions of FTX are very good, so whether it is Robinhood or other companies, there is no need to rashly acquire and put themselves in an unfamiliar operating environment. But he also said that he is happy to cooperate with different companies.

Answering this question risks spreading rumors, so I'm not going to start this thread.

first level title

Is FTX making money this season?

Coinbase announced its Q1 financial report last month, with a net loss of $430 million in the face of halved revenue and increased expenses.

Julia Chatterley：

Is FTX's trading business profitable during this market turmoil?

Because I think that this period of time is also a time when profitability can be used to distinguish good companies, ordinary companies, and bad companies.

The answer is yes. SBF said that FTX has been profitable for several consecutive quarters, including the last few quarters. He believes that the key lies in "steady expansion."

Yes, we did, including in recent seasons, we have been profitable for a period of time.

I think the key to sustainable profitability is steady growth. Of course, I am not saying that expansion is wrong, especially when the time and place are right, but expansion is undoubtedly a risky decision, and it will put oneself in a passive and vulnerable situation. So unless we find a great opportunity and invest it in a way we like, I won't expand easily.

SBF specifically mentions the expansion of personnel. He said before that although expansion in a bull market is reasonable, after research, he found that when a company expands at a high speed, it will make it difficult to coordinate between departments, and it will also lower the employment standards. Communication sucks, and you end up with no one to communicate, even with rewards.