At the New York Times DealBook summit, BlackRock chief executive Larry Fink warned that more cryptocurrency companies may go down in the wake of the collapse of the FTX cryptocurrency exchange.
Blackrock is one of the entities which is directly affected by the collapse of FTX, having invested about $24 million in the failed exchange. Blackrock manages roughly $10 trillion in assets, with a client list which includes customers ranging from enormous pension funds, to extremely high net worth individuals.
A long-time skeptic of cryptocurrencies, Fink stated, “I actually believe most of the companies are not going to be around.”
Commenting on Blackrock’s $24 million investment in FTX, Fink said, “Could we have been misled? Until we have more facts, I will not speculate.”
Still although he cited “misbehaviors of major consequences” at FTX, Fink said he still sees enormous potential in the technologies underlying cryptocurrencies, despite the problems we are seeing right now.
The collapse of FTX has already begun to spread to other companies. Crypto-lender BlockFi, which had loaned $100 million of user funds to FTX, has filed for bankruptcy. Genesis, which offered return-bearing accounts which lent out customer’s assets, is presently looking for investment, to avoid having to file for bankruptcy. Bloomberg reports the collapse of FTX has already taken down over 130 related entities.
Even exchanges with no exposure to FTX, like Kraken, are feeling the cooling of the crypto-market. Kraken announced it is laying off 1,100 employees, despite the fact it has no material exposure to FTX.
The Daily Financial Trends
