A leading exchange CEO: Raised $1.44B to address market concerns during Bitcoin's downward cycle

A leading exchange CEO, Phong Le, stated that part of the reason for establishing a $144 million reserve was to alleviate investor concerns about the company’s health during a Bitcoin downturn.

“We are important participants in the crypto and Bitcoin ecosystems. That’s why we decided a few weeks ago to start raising funds and increase our dollar reserves on the balance sheet to dispel these concerns,” Le said on CNBC’s Power Lunch on Friday.

On Monday, the leading exchange announced the $144 million reserve, raised through a stock sale. The company said the reserve is intended to maintain an amount sufficient to cover at least 12 months of dividends, and will eventually be expanded to cover 24 months of operating funds.

The new fundraising comes amid investor concerns about whether the company can continue to service its debt and pay dividends if the stock price falls too much.

“These are all market concerns,” Le said on Friday.

“We’re not going to have any problems paying dividends, and it’s very unlikely we’d need to sell Bitcoin, but… there’s concern in the market that we might not be able to meet our dividend obligations, which has led people to bet heavily on shorting Bitcoin,” he said.

“We solved this problem in 8.5 days, raising $144 million—equivalent to 21 months of dividend obligations. We did this, first, to dispel market concerns, but second, to show people that even in a Bitcoin down cycle, we still have the ability to raise funds.”

Last week, Le said the exchange would only consider selling Bitcoin if the stock price dropped below net asset value and the company was unable to obtain new capital.

The company also launched a “BTC Credit” dashboard, claiming it currently holds enough assets to pay over 70 years of dividends.