Despite FTX’s fall, Goldman Sachs wants to invest millions of dollars in cryptocurrencies

America’s leading merchant bank still believes in cryptocurrency technology and sees opportunities for redemption after FTX’s resounding fall.

Goldman Sachs plans to spend millions of dollars buying or investing in cryptocurrency-related companies after FTX’s resounding bankruptcy sent industry valuations plummeting and scared away some investors.

FTX’s fall has highlighted the need for greater transparency and regulation in the cryptocurrency industry, and major institutions such as Goldman Sachs see it as an opportunity to grow in the sector, its head of digital assets, Mathew McDermott, told Reuters.

Goldman Sachs has opened “due diligence” processes – which include a set of checks before a possible acquisition – on a number of cryptocurrency companies, he added, without giving further details.

“We see some really good opportunities at much more reasonable prices,” Mathew McDermott said.

Other more skeptical banks

FTX filed for US bankruptcy protection last month following massive customer withdrawals and a failed rescue attempt by rival Binance. Its fall sparked a crisis of confidence in the industry and calls for increased regulation.

“It certainly weighed on market sentiment, there’s absolutely no question about that,” Mathew McDermott said. “FTX was a star player in many parts of the ecosystem. – lie continues to perform well”.

However, banks that compete with Goldman Sachs are more skeptical about the outlook for the sector.

“I don’t think it’s an end of fashion or a disappearance, but I can’t attribute it [au secteur, ndlr] intrinsic value,” Morgan Stanley chief James Gorman said at the Dec. 1 Reuters NEXT event.

Meanwhile, HSBC chief Noel Quinn told a banking conference in London last week that he has no plans to expand into cryptocurrency trading or investing for retail banking customers.

Goldman Sachs has invested in 11 companies

Goldman Sachs, on the other hand, does not hide its interest. At the very time of FTX’s fall, bank CEO David Solomon told CNBC that he sees opportunities in the technology that underpins cryptocurrencies as its infrastructure formalizes.

The division headed by Mathew McDermott employs more than 70 people, seven of whom work in cryptocurrency options and derivatives trading.

Goldman Sachs has already invested in 11 digital asset companies that provide services such as compliance, cryptocurrency data and risk management.

The fallout from the FTX collapse has inflated Goldman Sachs’ trading volume, Mathew McDermott said, as investors seek to trade with regulated and well-capitalized counterparties.

“What has increased is the number of financial institutions that want to do business with us,” he said. “I suspect a number of them have worked with FTX in the past, but I can’t say with absolute certainty.”

Goldman Sachs also sees employment opportunities in cryptocurrencies and the tech industry, which is currently experiencing a wave of layoffs.

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