BlackRock Inc. Chief Executive Larry Fink said most crypto companies will probably fold in the wake of FTX’s collapse.
(Bloomberg) — BlackRock Inc. Chief Executive Larry Fink said most crypto companies will probably fold in the wake of FTX’s collapse.
“I actually believe most of the companies are not going to be around,” Fink said Wednesday during a wide-ranging interview at the New York Times DealBook Summit.
BlackRock, the world’s biggest asset manager, is among financial firms stung by the bankruptcy of the Bahamas-based crypto exchange founded by Sam Bankman-Fried, who’s scheduled to speak at the same event later in the day. BlackRock, which oversees about $8 trillion, invested roughly $24 million in FTX through a vehicle called a fund of funds, said Fink, a long-time skeptic of cryptocurrencies.
Money managers from Wall Street to Silicon Valley and beyond poured billions of dollars into FTX, pushing its valuation as high as $32 billion before it imploded earlier this month. Firms including Sequoia Capital and Tiger Global Management have since marked down their stakes to zero, as FTX and more than 130 affiliated entities went bust.
Read more: FTX’s Banking Web Raises Uncomfortable Questions for Regulators
Fink, 70, said he still sees potential in the technology underlying crypto, including instant settlement of securities and simplified shareholder voting.
Separately, Fink said he’s been working to counter criticism from across the political spectrum for BlackRock’s support of sustainable investing. Republicans have retaliated against his firm’s embrace of what they’ve described as “woke” capitalism, while Democrats and environmental activists have targeted BlackRock for investing in fossil-fuel producers.
Against that backdrop, BlackRock poured record amounts of money into US political campaigns this year. Fink said Wednesday that he has been spending a lot of time in Washington to “correct the narrative.”
(Updates with sustainable investing starting in sixth paragraph.)
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