Bitcoin billionaire Sam Bankman-Fried stepped in to rescue a pair of struggling cryptocurrency firms at a time when many industry players have been hammered by financial turmoil.

In a Twitter post on Wednesday, Bankman-Fried announced that one of his firms, FTX, would provide crypto lender BlockFi $250 million in revolving credit facility. It comes after BlockFi’s CEO Zac Prince revealed the firm liquidated an unspecified client's overcollateralized loan last week that Prince said was necessary to protect clients at a time of market stress.

Bankman-Fried defended BlockFi’s actions as prudent risk management and praised the firm’s "great leadership." Going further, he asserted that BlockFi remained financially strong and was functioning normally as Prince did last week.

“Sometimes leadership means acting decisively and that’s what BlockFi did: removing troublesome counterparties before they become a problem, and adding cash before it was necessary,” Bankman-Fried wrote in his Twitter thread.

The decision to transfer funds to BlockFi follows an earlier $500 million bailout of Voyager Digital by Alameda Research, another firm owned by Bankman-Fried. As part of this credit facility, Alameda provided Voyager with $200 million in cash and USDC stablecoin, as well as 15,000 in bitcoin that will serve as an emergency fund if it has to defend customer assets.

The cryptocurrency market has seen billions in value wiped out in recent weeks. Bitcoin, the most widely traded cryptocurrency, saw its value drop below $20,000 over the weekend before recovering. At the same time, the entire market capitalization for cryptocurrencies has fallen below the $1 trillion mark as investors retreat.

Like other assets, Bankman-Fried said cryptocurrencies are being weighed down by the recent hawkishness of the Federal Reserve. Last week, the Fed hiked interest rates by three-quarters of a percentage point as part of its efforts to bring down inflation. This was the largest single increase since 1994.

"Markets are scared," Bankman-Fried told NPR on Monday. "People with money are scared."

RELATED STORIES
Bitcoin