A dynamic duo of young billionaires to prevent crypto from collapsing

by Arthur · July 7, 2022

July 4, Changpeng Zhao twitret a picture of himself standing in front of the Statute of Liberty.

“Happy 4th of July! 20 years ago (2002) this nerdy boy came to New York to work at Bloomberg, just after 9/11,” he wrote. – We have come a long way since then.

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“This nerdy boy”

Zhao, 44, is now the founder and CEO of Binance, the world’s largest cryptocurrency exchange by trading volume.

Meanwhile, on the same day, Sam Bankman-Fried, 30, founder and CEO of FTX, retweeted a commercial for his cryptocurrency exchange showing football legend Tom Brady melting an ice block with a flamethrower.

FTX has bought naming rights to a sports arena in Miami, and Brady and his wife, supermodel Gisele Bundchen, are the ambassadors.

The two men – often referred to as CZ and SBF – are young billionaires who are transformed into a kind of dynamic duo by the blockchain world, who move in to save companies struggling with a seemingly relentless “crypto winter”.

“Sam and Changpeng are two very influential individuals in the cryptosphere, with incredibly deep pockets,” said Martin Hiesboeck, head of blockchain and crypto research at Uphold. “Their businesses, along with their personal fortunes, are enough to absorb more than one smaller competitor. They will choose to do so if it makes sense for their business strategy and corporate vision.”

‘Enormous resilience’

Last month, Zhao said he believed the blockchain industry had “shown tremendous resilience” despite the collapse of the crypto market, which according to some estimates has wiped out more than $ 2 trillion in value in just a few months.

He added that his company has “a responsibility to help industry players survive and hopefully thrive. This is the case even if there are no direct benefits for us or we experience negative returns.”

And Zhao also said that Binance was looking to fill 2,000 opening positions – at a time when so many companies are cutting staff –tweeting that “it was not easy to say no to Super Bowl ads, stadium naming rights, big sponsorship deals a few months ago, but we did.”

Bankman-Fried also feels the need to lend a hand, telling NPR in a recent interview that “I feel we have a responsibility to seriously consider going in, even if it is at a loss to ourselves, to stop infect.”

“Blood in the streets”

FTX recently entered into an agreement with BlockFi that gives the stock exchange the opportunity to buy the troubled cryptocurrency lender for up to $ 240 million. The agreement also includes a $ 400 million revolving credit facility.

“Nathan Rothschild, a 19th-century British financier and member of the Rothschild banking family, is credited with saying that ‘the time to shop is when there’s blood in the streets,'” said David Lesperance, managing partner for immigration and tax advisers at Lesperance & Associates. “Sam Bankman-Fried and CZ are riding the tiger this crypto winter. If they are smart about buying distressed cryptocurrencies, they could end up being some of the richest people in the world. “

However, he added, if they err on the side of procurement or if cryptocurrencies completely collapse, “they would also be world record holders in the total wealth gained and lost in the shortest possible time.”

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“While crawling the crypto streets for attractive acquisitions,” Lesperance said, “they must also keep a close eye on regulators who scrutinize their various businesses for past and present activities that have crossed legal boundaries regarding fraud, busting sanctions, securities laws and money laundering. “

A Reuters survey published on June 6 said that Binance processed $ 2.35 billion in transactions stemming from investment fraud, hacks and the sale of illegal drugs. A company spokesman said the report was “grossly misinformed.”

“Very Heart of Innovation”

Some may be concerned that two people have so much control over the sector, but Hiesboeck does not see it that way.

“Blockchain and distributed ledger technology are at the very heart of innovation in all sectors from finance, insurance and manufacturing down to entertainment and public services,” he said. “Having a few large companies with a strong voice can only help the space to be taken more seriously.”

The two billionaires do not believe in throwing good money after bad. Zhao has said that not all rescue packages are the same, citing some companies, products or projects that are “poorly designed, poorly managed and poorly run.”

Bankman-Fried recently twitret: “Really not sure why the meme about FTX and mining companies is spreading, the very quote was that we * do not * really look into the room.”

Not all investments will be a winner. Crypto broker Voyager Digital said last month that it had secured loans from Bankman-Frieds Alameda Research Ventures.

Then the company said on July 5 that it was filing for bankruptcy, pointing to the long-standing volatility and contagion in the crypto markets in recent months, and that Three Arrows Capital had defaulted on a loan from the company’s subsidiary, Voyager Digital, LLC. .

Alameda Research was Voyager’s largest creditor with a claim of $ 75 million, according to records.

“Thank you for rescuing the miners”

Social media has the usual range of comments about the two men, ranging from mockery to worship.

“Congratulations on your achievements in life,” one person said tweeted to Zhao. “you were and are a brave man to get where you are, you must have gone through many things in the process! that generated this example of a person for everyone.”