Crypto’s last man standing

Two years ago scarcely anyone in mainstream finance had heard of Sam Bankman-Fried, or ftx, the cryptocurrency exchange he launched in 2019. Both gained greater prominence, first as the crypto craze reached fever pitch and then as crypto fell to Earth. Mr Bankman-Fried (widely known as sbf) has lately been at the centre of attempts to rescue beleaguered crypto firms. To some observers, the role calls to mind the rescue missions organised by John Pierpont Morgan and America’s other banking scions in the early 20th century. The comparison is surprisingly instructive.

The recent slump has left destruction in its wake. Some crypto-lending firms, notably Celsius, have collapsed; some stablecoins, like terra, have been obliterated. At least one crypto hedge fund, Three Arrows Capital, has gone bust. Estimates of sbf’s personal wealth have tumbled, too, from $26bn just over three months ago to nearer $8bn now. Nonetheless, his companies (ftx and Alameda, a trading firm) seem to be the great survivors of the recent chaos. ftx had kept employee numbers relatively low; sbf has said the exchange is still profitable. Well-timed funding rounds early this year saw its global and American arms raising $400m each. That has enabled sbf to help others in need. In June Voyager Digital, a broker, secured loans worth $485m from Alameda. BlockFi, another trader, has received a revolving line of credit from ftx’s American arm.