Avalanche Founder Says Company Has ‘Very Little Exposure’ to FTX
While the crypto world continues to navigate the fallout from the collapse of FTX, Ava Labs says it dodged the bullet.
"We had very little exposure, and we're grateful for it," Ava Labs founder and CEO Emin Gün Sirer told Decrypt.
Launched in 2018, Ava Labs is the company behind the Avalanche Network. Ava Labs built the Avalanche blockchain on the promise of extreme scaling capabilities and fast confirmation times.
In a Wednesday Twitter Spaces, Sirer said he is relieved that Avalanche had little exposure to the exchange, acknowledging the damage done by FTX and its then-CEO Sam Bankman-Fried.
Gün Sirer said the blowback went back further than when the company filed for bankruptcy on November 11, 2022, or when Bankman-Friend opened the back door to funnel funds to Alameda Research, FTX's sister company.
"It started when they started doing these positronic things to pump certain coins at the expense of others," Gün Sirer said. "It's not after the crash, the bulk of the damage happened."
The term positronic refers to the positronic brain, a fictional technological device originally conceived by science fiction writer Isaac Asimov. It acts as the central processing unit for robots, acting as their brain.
GM to everyone who did not engage in fraud and create market mispricings and illiquidity problems for others.— Emin Gün Sirer🔺 (@el33th4xor) November 16, 2022
Gün Sirer says the real problem began when Bankman-Fried engaged in market manipulation to prop up the value of certain coins on paper in order to borrow against them.
"That's the damage he did to us," Gün Sirer said. "It's not insignificant, but I think we were generally spared in this final crash."
But “little exposure” doesn't mean "no exposure."
Impossible not to be exposed to FTX: Ava Labs
"There are cases where, for example, we funded the project, and [FTX] funded the same project," Gün Sirer says. "But that's independent, two different people going into a good opportunity."
Gün Sirer says that Ava Labs did not take any investments from FTX or vice versa. "We considered being investors in FTX a while ago," he said, saying that Avalanche decided to pass on the deal.
"I don't say none because it's impossible to say no [exposure]," Gün Sirer said. "If I were to say that, it would be wrong."
Literally every single Samcoin investor would do it all over again. No one got into a Sam operation for its decentralization or adherence to crypto principles. — Emin Gün Sirer🔺 (@el33th4xor) November 16, 2022
As Gün Sirer explained, Ava Labs had an account on FTX with only a small amount of coins. "If you are a player in this industry, you are in some way touched by it," he said. "So I don't want to speak in some absolute."Source