Goldman Sachs Plans to Invest “Tens of Millions” in Crypto Companies: Report

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Investment banking firm Goldman Sachs Group plans to invest tens of millions of dollars in cryptocurrency companies, Reuters reported, citing an interview with Mathew McDermott, the firm’s global head of digital assets.

Goldman’s head of digital assets said the company plans to buy or invest in crypto businesses after the collapse of the FTX exchange hurt investor interest and valuations.

The FTX implosion has increased the need for more trusted and regulated cryptocurrency players, and big banks see an opportunity to get back to business, McDermott told Reuters.

Goldman does due diligence on a number of different crypto companies, McDermott added, without sharing further details.

“We see some really good opportunities, at a much more reasonable price,” McDermott said in an interview.

“It’s definitely pushed the market back in terms of sentiment, there’s no doubt about it,” McDermott said. “FTX was a poster child in many parts of the ecosystem. But to reiterate, the underlying technology continues to work.”

Although the amount Goldman might inject may not be significant for the Wall Street giant, which earned $21.6 billion in 2021, its willingness to continue investing amid the sector’s crisis shows that it senses a long term opportunity.

Goldman has invested in 11 digital asset companies that provide services such as compliance, cryptocurrency data and blockchain management.

The FTX Saga

Crypto exchange FTX filed for bankruptcy protection in the United States in November and its founder Sam Bankman-Fried resigned as chief executive, after rival exchange Binance pulled out of a project acquisition.

Bankman-Fried was accused of routing client deposits to FTX-affiliated trading firm Alameda Research, and the exchange saw withdrawals of around $6 billion in just 72 hours.

FTX failed in the cryptocurrency version of a bank run, when customers tried to withdraw their assets all at once amid growing doubts about the financial strength of the company and its affiliate trading arm, Alameda Research .

Since its collapse, FTX’s new management has called the management of the cryptocurrency exchange a complete failure of corporate controls.”

The FTX founder had tweeted recently saying he would testify before the House Financial Services Committee after he finished “learning and considering” the events that led to his crypto exchange’s dramatic collapse. change.

The US House Financial Services Committee plans to hold a hearing in December to investigate FTX’s collapse and expects to hear from the companies and individuals involved, including founder and CEO Bankman-Fried.

Last week, committee chair Maxine Waters invited Bankman-Fried to participate in the panel hearing on Dec. 13.

“Once I finish learning and reviewing what happened, I would feel like it was my duty to come before the committee and explain myself,” the official wrote. founder and former CEO of FTX in a response to Waters.

Bankman-Fried added that he doesn’t know if that will happen until Dec. 13.

He dismissed suggestions of fraud in a series of interviews last week after the collapse of his business stunned investors and left creditors facing losses totaling billions of dollars.

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