On July 1, As per the recent report, Sam-Bankman Fried, co-founder and CEO of FTX, unveiled his plan to acquire failing crypto miners in order to help them provide continuity of operations.
This follows FTX’s deal with BlockFi to offer a $400 million credit facility and a $240 million option to acquire the firm.
According to Bankman-Fried:
“When we think about the mining industry, they do play a little bit of role in the possible contagion spread, to the extent that there are miners that were collateralizing borrows with their mining rigs. There might come a really compelling opportunity for us – I definitely don’t want to discount that possibility.”
Notably, the CEO has apparently been looking for crypto mining firms with a balance-sheet influence on crypto-lending firms. According to the survey, crypto-miners have grown “aggressively” during the previous two years as the market has risen to new highs.
However, due to the bear market, approximately $4 billion in crypto mining device debts are at risk. This is because the value of much of this equipment has decreased by half since the market peaked in November 2021.
Many crypto mining firms have been negatively impacted by the decline since the start of the crypto winter, with many liquidating their holdings. Despite a drop in mining activity, the energy cost of mining continues to rise.