BlockFi announced a $250M line credit from FTX just days after FTX CEO Sam BankmanFried stated that the exchange would bailout other companies. BlockFi, a crypto lender, has been granted a $250 million revolving credit line from the crypto exchange . CEO Zac Prince announced this Tuesday morning via Twitter.
He wrote in a twitter thread, “Today @BlockFi signed term sheets with @FTX_Official in order to secure a $250M Revolving Credit Facility providing us with capital that further strengthens our balance sheet.”
Prince stated that the proceeds of the FTX loan are contractually subordinated to all client balances. This means that BlockFi will fulfill its obligations on client accounts – BlockFi Interest Accounts and BlockFi Personalized Yield – before paying FTX.
This has been a particularly difficult time for the company during the downturn. BlockFi joined the growing list of companies that are cutting their workforce to weather crypto winter. Its staff was cut by ” approximately 20%.”
Prince stated on Twitter at the time that all BlockFi products and services would continue operating normally.
It is a timely disclaimer.
Celsius, a competitor to BlockFi’s crypto lending, frozen account withdrawals, swaps, and transfers last Sunday in order to weather ” extreme markets.” Yesterday, the company stated that it requires more time to stabilize accounts before it unfreezes them.
BlockFi is facing its own challenges. BlockFi has been facing its own challenges. Last week, it made a $1million payment to the Iowa Insurance Division in part of a larger 100 million penalty that BlockFi paid to settle an investigation into high-yield accounts.
Prince suggested that the announcement of the credit line could open the doors to a partnership between FTX, BlockFi.
He stated on Twitter that the agreement “also unlocks future collaboration & innovation between BlockFi & FTX, as we work to increase prosperity worldwide through crypto-financial services.”
It seems that the feeling is mutual. Yesterday, FTX CEO Sam Bankman Fried stated that the cryptocurrency exchange has a responsibility to help struggling businesses during this unrelenting bearmarket.
He said that even if they weren’t responsible for it or were not involved in it, it was still a problem. This is referring to the “contagion wave” that has been affecting crypto markets. “I believe that’s what’s good for the ecosystem and I want it to grow and thrive.”