BlockFi announced a $250 million line of credit from the FTX exchange a day after CEO Sam Bankman Fried said that the exchange would bail out other companies so let’s read more today in our latest cryptocurrency news.
Crypto lender BlockFi announced a $250 million line of credit from exchange FTX as the CEO Zac Prince announced:
“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.”
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.
— Zac Prince (@BlockFiZac) June 21, 2022
Prince said the proceeds from the FTX Loan are subordinate to the client balances meaning that BlockFi will satisfy all obligations on client accounts such as Interest accounts, Personalised yield, and loan collateral before paying FTX. The company was hit hard by the downturn and last week it joined the growing list of companies that reduce the workforce to weather the winter and cut the staff by 20%. at the time, Prince said that all of BlockFi’s products and services will continue to operate as usual.
Celsius as one of the main crypto lending competitors froze account withdrawals recently to help weather the extreme market conditions. The company said ad ay ago that it needs more time to stabilize before unfreezing these accounts. In the meantime, BlockFi hit its own walls. The company made a $1 million payment to the Iowa Insurance Division as a part of the larger $100 million penalty that they agreed on ot pay and settle an investigation into the high-yield accounts.
In the announcement, Prince hinted that it can open the door for a partnership between BlockFi and FTX:
“This agreement also unlocks future collaboration and innovation between BlockFi & FTX as we work to accelerate prosperity worldwide through crypto financial services.”
The feeling seems to be mutual as the CEO Sam Bankman Fried said the crypto exchange has a responsibility to bail out struggling companies in today’s bear market:
“Even if we weren’t the ones who caused it, or weren’t involved in it. I think that’s what’s healthy for the ecosystem, and I want to do what can help it grow and thrive.”
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