BlackRock Had Exposure To FTX: CEO Larry Fink
- BlackRock CEO Larry Fink revealed that the asset management firm had invested $24 million in the now bankruptcy crypto exchange FTX and stated that there were several “misbehaviors” at the exchage.
- Fink believes that dark days lay ahead for the current global economy due to higher-than-usual inflation rate, elevated interest rates and lower growth, and limited room for fiscal stimulus.
- The BlackRock executive was present at an event hosted by the New York Times DealBook wherein he stated that in the near future, many crypto firms “are not going to be around.”
BlackRock, the world’s largest asset management firm based in New York City, had invested close to $24 million in the now-disgraced crypto exchange FTX, which was founded and led by Sam Bankman-Fried to the point of bankruptcy last month. The CEO of the asset management firm, Larry Fink, said that there were several “misbehaviors” at the crypto exchange, as per a report from Reuters.
The BlackRock executive stated that because FTX was not operating in a healthy capacity, the technology behind crypto exchange doesn’t become obsolete. He still believes that the future of blockchain technology is bright with many applications that can prove revolutionary for the current financial world, stated the report. The executive further stated that his firm has written off the $24 million that it had invested in the crypto exchange.
“We’re going to have to wait to see how this all plays out (with FTX),” the BlackRock CEO said. “I mean, right now we can make all the judgment calls and it looks like there were misbehaviors of major consequences.”
According to the report, Fink was present at an event hosted by the New York Times DealBook wherein he stated that in the near future, many crypto firms “are not going to be around,” a statement which is similar to what Bankman-Fried stated prior to his exchange’s collaspe earlier this year. SBF believed that many crypto firms were “secretly insolvent” in an interview with Forbes.
BlackRock had invested close to $24 million in FTX via a billionaire fund the New York-based firm manages. Additionally, global asset managers such as Temasek Holdings, venture capital fund Tiger Global and Sequoia Capital have all invested in the now bankrupt crypto exchange.
“We are in the business of taking risks. Some investments will surprise to the upside, and some will surprise to the downside. We do not take this responsibility lightly and do extensive research and thorough diligence on every investment we make,” said Sequoia, which was one of the biggest backers of the exchange.
On the other hand, the CEO of BlackRock believes that blockchain technology “will be very important” and also stated that “the next generation for markets and next generation for securities will be tokenization of securities.”
Fink believes that dark days lay ahead for the current global economy due to higher-than-usual inflation rate, elevated interest rates and lower growth, and limited room for fiscal stimulus.
“We’re actually going to enter a period of more what I would call malaise,” he said. “We’re just not going to have an economy that is based on real growth that we were accustomed to.”