Galaxy Digital's Novogratz said FTX news is a `body blow' to crypto industry trust
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Mike Novogratz, founder and CEO of Galaxy Digital (OTCPK:BRPHF) said the implosion of FTX and its founder Sam Bankman-Fried is a "body blow" to trust in the crypto industry and trust in the system.
"It's unbelievably frustrating that we have a situation that basically looks like Theranos," Novogratz said in an interview on CNBC.
Novogratz's comments come as Tron founder Justin Sun appeared to suggest he may extend a lifeline to FTX.
"I'm furious actually," Novogratz said. "Macro guys try not to get angry. It's kind of, you know, try to stay rational. But this is just so frustrating ..."
Novogratz said he announced on Galaxy Digital's earnings call on Wednesday that the firm had $77 million in exposure to FTX and he's not optimistic that he will get much of that back.
"It's a mess," Novogratz said. "I don't think it's easily taken over. There is so much liability that comes with a company like that. There will be some drawn out bankruptcy proceeding."
On Wednesday, Bloomberg reported that Bankman-Fried warned FTX investors that his cryptocurrency exchange would need to file for bankruptcy unless it can garner more capital.