Sam Bankman-Fried steps in to bail out BlockFi

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After res­cu­ing cryp­to-asset bro­ker Voy­ager Dig­i­tal last week, cryp­to exchange FTX founder Sam Bankman-Fried, often known as SBF, has now agreed to bail out cryp­to lender BlockFi. 

See relat­ed arti­cle: Block­Fi among those that fore­closed on Three Arrows Cap­i­tal: report

Fast facts

  • FTX agreed to extend a US$250 mil­lion revolv­ing cred­it facil­i­ty to Block­Fi on Tues­day, Block­Fi CEO Zac Prince said on Twitter.
  • Block­Fi ful­ly accel­er­at­ed a loan, ful­ly liq­ui­dat­ing or hedg­ing all asso­ci­at­ed col­lat­er­al with a large client that failed to meet its oblig­a­tions on an over­col­lat­er­al­ized mar­gin loan, Prince said on June 17. “We believe we were one of the first to take action with this coun­ter­par­ty,” he said. 
  • “Block­Fi has care­ful risk man­age­ment and great lead­er­ship” and act­ed pre­emp­tive­ly to remove at-risk coun­ter­par­ties “with no debt/risk from 3AC, Cel­sius, etc.,” Bankman-Fried said
  • On June 17, Voy­ager Dig­i­tal announced that it had secured a revolv­ing loan of US$500 mil­lion from Alame­da Research, SBF’s quan­ti­ta­tive research firm.
  • Voy­ager has said that it will pur­sue recov­ery from cryp­to hedge fund Three Arrows Cap­i­tal (3AC) but has yet to deter­mine the amount it will be able to recover. 
  • On Wednes­day, Voy­ager announced that it would issue a “notice of default” to 3AC in case of fail­ure of loan repayment.
  • Voyager’s total expo­sure to 3AC amounts to approx­i­mate­ly US$650 mil­lion — 3AC had tak­en a loan of around US$350 mil­lion worth of USDC and 15,250 Bit­coin val­ued at over US$300 mil­lion at cur­rent prices.
  • 3AC is sup­posed to repay US$25 mil­lion worth of USDC by June 24 and the entire loan amount by June 27, but has yet to repay any of the amounts.
  • Voy­ager shares tanked by over 53% over the past day since the firm declared its expo­sure to 3AC.

See relat­ed arti­cle: Con­ta­gion risk from Three Arrows Cap­i­tal weighs on Bit­coin, crypto



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