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Investment banking company Goldman Sachs Group is planning to invest tens of millions of dollars in cryptocurrency companies, reported Reuters, citing an interview with Mathew McDermott, global head of digital assets at the firm.

Goldman's head of digital assets said the company is planning  to buy or invest in crypto firms after the collapse of FTX exchange hurt investor interest and valuations.

FTX's implosion has heightened the need for more trustworthy, regulated cryptocurrency players, and big banks see an opportunity to pick up business, McDermott told Reuters.

Goldman is doing due diligence on a number of different crypto firms, McDermott added, without sharing any further details.

"We do see some really interesting opportunities, priced much more sensibly," McDermott had said in an interview.

"It's definitely set the market back in terms of sentiment, there's absolutely no doubt of that," McDermott said. "FTX was a poster child in many parts of the ecosystem. But to reiterate, the underlying technology continues to perform."

While the amount Goldman may reportedly infuse is not large for the Wall Street giant, which earned $21.6 billion in 2021, its willingness to keep investing amid the sector shakeout shows it senses a long term opportunity.

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

The FTX saga

Crypto exchange FTX filed for US bankruptcy protection in November and its founder Sam Bankman-Fried resigned as chief executive, after rival exchange Binance walked away from a proposed acquisition.

Bankman-Fried was accused funneling customer deposits to FTX's affiliated trading firm Alameda Research, and the exchange experienced withdrawals of about $6 billion in just 72 hours.

FTX failed in the cryptocurrency version of a bank run, when customers tried to withdraw their assets all at once because of growing doubts about the financial strength of the company and its affiliated trading arm, Alameda Research. 

Since its collapse, FTX's new management has called the cryptocurrency exchange's management a “complete failure of corporate controls."

The FTX founder had tweeted recently saying that he would testify before the House Financial Services Committee after he finished "learning and reviewing" the events that led to the spectacular collapse of his cryptocurrency exchange.

The US House Financial Services Committee plans to hold a hearing in December to investigate the collapse of FTX and expects to hear from the companies and individuals involved, including founder and CEO Bankman-Fried.

Committee Chair Maxine Waters last week invited Bankman-Fried to participate in the panel's hearing on 13 December.

"Once I have finished learning and reviewing what happened, I would feel like it was my duty to appear before the committee and explain," the founder and former FTX CEO wrote in a reply to Waters.

Bankman-Fried added that he was unsure if that would happen before 13 December.

He rejected suggestions of fraud in a range of interviews last week after his company's collapse stunned investors and left creditors facing losses totalling billions of dollars.

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