Crypto lender BlockFi on Tuesday announced that it has received a $250 million revolving line of credit from crypto exchange FTX to help strengthen its balance sheet.
Last week, BlockFi rival Celsius Network halted all withdrawals and transfers, citing “extreme market conditions” as crypto prices have plummeted, and fellow crypto lender Babel Finance followed suit. BlockFi said last week it was still meeting all withdrawal requests and “increased demand” from institutional borrowers, though it also announced deep layoffs and chief executive Zac Prince. tweeted on Thursday That the company liquidated a highly collateralized margin loan of a large client to mitigate risk.
“Today’s landmark announcement reaffirms BlockFi’s commitment to serving its customers and ensuring the safety of their funds,” Prince said in a statement on Tuesday.
In a series of tweetsPrince said the deal “further enhances the strength of our balance sheet and platform,” and that “the proceeds of the credit facility are intended to be contractually subordinated to all client balances across all account types.”
The credit facility comes after FTX CEO Sam Bankman-Fried told NPR over the weekend that big companies like FTX should help struggling crypto companies when they can.
“It seems to me that we have a responsibility to seriously consider taking action, even if it causes harm to itself,” he told NPR on Sunday. I think it’s healthy for the ecosystem, and I want to do what can help it grow and flourish. ,
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In a statement on Tuesday, Bankman-Fried said: “The BlockFi team has always demonstrated a strong bias toward prudent risk management and prompt action. Protecting clients’ assets is their top priority that drives them from strong positions. allows to do.”
BlockFi and other crypto companies have felt the severe impact due to the drop in cryptocurrency prices in recent months.
Bitcoin has lost nearly 70% of its value since peaking in November, falling below the $20,000 level over the weekend to its lowest price in 18 months. According to data from Coinbase, bitcoin BTCUSD was trading -2.26% on Tuesday night at around $20,493, which is down 56% so far. Ethereum ETHUSD was trading at $1,103, down almost 70% to date -2.60%.
