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

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Cryp¬≠to lend¬≠ing plat¬≠form Block¬≠Fi has signed a term sheet with lead¬≠ing cryp¬≠to exchange FTX to secure a $250 mil¬≠lion revolv¬≠ing cred¬≠it facil¬≠i¬≠ty, Block¬≠Fi CEO Zac Prince announced June 21.

Accord¬≠ing to Prince, this agree¬≠ment will offer Block¬≠Fi access to addi¬≠tion¬≠al cap¬≠i¬≠tal, which the firm will use to strength¬≠en its bal¬≠ance sheet.

The pro¬≠ceeds of the cred¬≠it facil¬≠i¬≠ty will con¬≠trac¬≠tu¬≠al¬≠ly be sub¬≠or¬≠di¬≠nate to all client bal¬≠ances across all Block¬≠Fi accounts. These include Block¬≠Fi Inter¬≠est Account (BIA), Block¬≠Fi Per¬≠son¬≠al¬≠ized Yield (BPI), and Block¬≠Fi loan col¬≠lat¬≠er¬≠al. Block¬≠Fi intends to use the pro¬≠ceeds to bol¬≠ster its oper¬≠a¬≠tions as the bear mar¬≠ket con¬≠tin¬≠ues rav¬≠aging the cryp¬≠to space.

BlockFi seeks to keep user funds safe

Prince not¬≠ed that this deal under¬≠scores BlockFi‚Äôs com¬≠mit¬≠ment to serv¬≠ing its clients and ensur¬≠ing the safe¬≠ty of their funds.

In the past week, Cel¬≠sius Net¬≠work sus¬≠pend¬≠ed with¬≠drawals, swaps, and trans¬≠fers on its plat¬≠form due to liq¬≠uid¬≠i¬≠ty issues. In a rip¬≠ple effect, cryp¬≠to hedge fund Three Arrows Cap¬≠i¬≠tal (3AC) faced liq¬≠ui¬≠da¬≠tion after fail¬≠ing to meet mar¬≠gin calls from lenders. Accord¬≠ing to a Finan¬≠cial Times report, Block¬≠Fi was among the lenders that liq¬≠ui¬≠dat¬≠ed 3AC.

While Block¬≠Fi did not con¬≠firm its role in liq¬≠ui¬≠dat¬≠ing 3AC, Prince said the com¬≠pa¬≠ny liq¬≠ui¬≠dat¬≠ed a large coun¬≠ter¬≠par¬≠ty after fail¬≠ing to meet mar¬≠gin calls. He did not reveal the name of the said coun¬≠ter¬≠par¬≠ty. How¬≠ev¬≠er, Prince claimed Block¬≠Fi was among the first lenders to liq¬≠ui¬≠date the third par¬≠ty, and that act¬≠ing quick¬≠ly helped keep cus¬≠tomer funds safe.

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