BlockFi secures $250 mln credit from FTX amid bear market blues
The new credit line will be used to fulfill client balances across all accounts
By Shashank Bhardwaj
In a tweet posted Tuesday, June 21, BlockFi CEO Zac Prince revealed that the company has secured $250 million in credit from leading crypto platform FTX.
“Today @BlockFi signed a term sheet with @FTX_Official to secure a $250M revolving credit facility providing us with access to capital that further bolsters our balance sheet and platform strength,” the tweet read. He also added that “the proceeds of the credit facility are intended to be contractually subordinated to all client balances across all account types (BIA, BPY & loan collateral) and will be used as needed.”
The $250 million credit for BlockFi comes at a time when the latest market crash has forced many crypto companies to reduce their workforces and transform business models to adapt to the recent turn of events. Due to the bearish market dominance, other cryptocurrency platforms have also been forced to halt operations and withdrawals.
Along with praising his team's efforts during the ongoing volatility in the crypto market, Prince also stated that the new line of credit will secure users' funds across all account types.
In a tweet last week, Prince had claimed that the company was forced to liquidate a major client that failed to meet its obligations on an overcollateralized loan. While the name of the client was not mentioned, the news came at a time when there was much speculation about the solvency of crypto investment firm Three Arrows Capital.
It's not the first time FTX CEO Sam Bankman-Fried has intervened to save a cryptocurrency business that has been negatively damaged by the current market collapse. Alameda Research, a quant trading firm formed by Bankman-Fried, recently agreed to extend a revolving line of credit to cryptocurrency broker Voyager Digital.
Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash