Changpeng Zhao criticises Alameda Research’s deal with Voyager Digital
Binance CEO Changpeng Zhao criticised Alameda Research for providing a $500 million loan to crypto broker Voyager Digital. In a Decrypt podcast, he said he would never agree to such an arrangement.
On June 18, Voyager Digital said that Sam Bankman-Fried’s company provided it with a loan of 200 million USDC and opened a revolving credit line for 15 000 BTC (~$321 million at the time of writing).
When the crypto broker filed for bankruptcy, it emerged that Alameda Research was the second-largest borrower by the amount drawn from Voyager Digital (about $376.8 million) after Three Arrows Capital (3AC). The company could rely on these assets to meet creditors’ obligations.
“Personally, I like very simple deals, and, to a large extent, Binance as well. We are not fond of arrangements such as: ‘Hey, I owe you money, you return this amount, you invest in me, I give you even more debt, and then you rescue me’. Why don’t we just return all the money, go back to the starting point and talk about the net balance, who owes whom how much?”, — Zhao said.
Earlier, the Binance chief said the Alameda deal is unlikely to save Voyager Digital.
So, 3AC owes Voyager a few 100m, went bust. FTX/Alameda gives 3AC $100m, but didn’t save it.
Alameda invests in Voyager, then takes a $377 million loan from Voyager… ok…
V went bust. FTX didn’t “bail them out” or return the money?
hard to follow?https://t.co/yx6RJjVZrB
— CZ 🔶 Binance (@cz_binance) July 7, 2022
“So, 3AC owed Voyager several hundreds of millions and went bust. FTX/Alameda give 3AC $100 million, but did not save it. Alameda invests in Voyager, then takes a loan of $377 million from the broker… okay… Voyager went bankrupt. FTX didn’t “save” them or return the money? Hard to follow?”, — he wrote.
In June, Bankman-Fried said that Alameda Research is taking steps to mitigate negative developments in the crypto market due to problems Celsius and Three Arrows Capital.
In a recent Reuters interview, the entrepreneur noted that FTX has “a few billions” to rescue companies that have run into trouble. He said several firms had approached him for help. He stressed that the worst part of the crisis is behind us.
Zhao also stated that the exchange is “obliged” to protect users and help other market participants survive. However, in his view, there are “bad projects” that should not be saved.
Binance chief says the exchange is in talks to rescue more than 50 companies.
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