BlockFi Secures $250 Million Line of Credit score From FTX

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Crypto lender BlockFi has secured a $250 million revolving line of credit score from crypto alternate FTX, CEO Zac Prince introduced Tuesday morning on Twitter.

“At the moment @BlockFi signed a time period sheet with @FTX_Official to safe a $250M revolving credit score facility offering us with entry to capital that additional bolsters our stability sheet and platform energy,” he wrote in a Twitter thread.

Prince mentioned the proceeds from the FTX mortgage are contractually subordinate to all consumer balances, which means that BlockFi will fulfill its obligations on consumer accounts—BlockFi Curiosity Accounts, BlockFi Customized Yield and mortgage collateral—earlier than paying FTX.

The corporate has been particularly laborious hit within the downturn. Final week BlockFi joined the rising checklist of corporations decreasing their workforce to climate the crypto winter, reducing its employees by “roughly 20%.”

On the time, Prince mentioned on Twitter that each one of BlockFi’s services and products would proceed to function usually. 

It’s a well timed disclaimer. 

Celsius, one in every of BlockFi’s crypto lending opponents, froze account withdrawals, swaps and transfers final Sunday to assist it climate “excessive market situations.” Yesterday, the corporate mentioned it wants extra time to stabilize earlier than unfreezing accounts.

In the meantime, BlockFi has hit its personal headwinds. Final week, the corporate made a $1 million fee to the Iowa Insurance coverage Division as half of a bigger $100 million penalty that BlockFi agreed to pay to settle an investigation into its high-yield accounts.

‘Future collaboration’

In his announcement of the road of credit score, Prince hinted that it may open the door to a partnership between FTX and BlockFi.

“This settlement additionally unlocks future collaboration and innovation between BlockFi & FTX as we work to speed up prosperity worldwide by means of crypto monetary companies,” he mentioned on Twitter.

The sensation appears to be mutual. Yesterday, FTX CEO Sam Bankman-Fried mentioned the cryptocurrency alternate has a “accountability” to bail out struggling corporations throughout this unrelenting bear market.

“Even when we weren’t those who brought on it, or weren’t concerned in it,” he mentioned, referring the wave of “contagion” that is impacting crypto markets. “I feel that is what’s wholesome for the ecosystem, and I wish to do what may help it develop and thrive.”

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