BlockFi gets $250 million credit facility from FTX to support platform

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Cryp­to lend­ing plat­form Block­Fi has signed a term sheet with lead­ing cryp­to exchange FTX to secure a $250 mil­lion revolv­ing cred­it facil­i­ty, Block­Fi CEO Zac Prince announced June 21.

Accord­ing to Prince, this agree­ment will offer Block­Fi access to addi­tion­al cap­i­tal, which the firm will use to strength­en its bal­ance sheet.

The pro­ceeds of the cred­it facil­i­ty will con­trac­tu­al­ly be sub­or­di­nate to all client bal­ances across all Block­Fi accounts. These include Block­Fi Inter­est Account (BIA), Block­Fi Per­son­al­ized Yield (BPI), and Block­Fi loan col­lat­er­al. Block­Fi intends to use the pro­ceeds to bol­ster its oper­a­tions as the bear mar­ket con­tin­ues rav­aging the cryp­to space.

BlockFi seeks to keep user funds safe

Prince not­ed that this deal under­scores BlockFi’s com­mit­ment to serv­ing its clients and ensur­ing the safe­ty of their funds.

In the past week, Cel­sius Net­work sus­pend­ed with­drawals, swaps, and trans­fers on its plat­form due to liq­uid­i­ty issues. In a rip­ple effect, cryp­to hedge fund Three Arrows Cap­i­tal (3AC) faced liq­ui­da­tion after fail­ing to meet mar­gin calls from lenders. Accord­ing to a Finan­cial Times report, Block­Fi was among the lenders that liq­ui­dat­ed 3AC.

While Block­Fi did not con­firm its role in liq­ui­dat­ing 3AC, Prince said the com­pa­ny liq­ui­dat­ed a large coun­ter­par­ty after fail­ing to meet mar­gin calls. He did not reveal the name of the said coun­ter­par­ty. How­ev­er, Prince claimed Block­Fi was among the first lenders to liq­ui­date the third par­ty, and that act­ing quick­ly helped keep cus­tomer funds safe.



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