The famous crypto lending platform, BlockFi announced that they received a $250 million revolving line of credit from the crypto exchange FTX. the CEO of BlockFi, Zac Prince announced this on Tuesday morning on his official Twitter handle. He tweeted, “Today BlockFi signed a term sheet with FTX to secure a $250M revolving credit facility providing us with access to capital that further bolsters our balance sheet and platform strength. The proceeds from the FTX loan are contractually subordinated to all client balances, meaning that BlockFi will satisfy its obligations on client accounts such as BlockFi interest accounts, BlockFi personalized yield, and loan collateral before paying FTX”.
This month, the largest crypto lending firm, BlockFi reduced its workforce by roughly 20% by cutting down its workforce and joined the growing list of firms. The CEO of BlockFi notified that all the products and services owned and provided by BlockFi will continue to operate normally. Celsius, one of the largest crypto lending firms and the competitor of BlockFi had frozen all account withdrawals, swaps, and transfers last week.
Crypto Lender BlockFi Receives $250 Million Line Of Credit From FTX
Meanwhile, the CEO of BlockFi, Prince also announced a future collaboration between FTX and BlockFi. “This agreement also unlocks future collaboration and innovation between BlockFi and FTX as we work to accelerate prosperity worldwide through crypto financial services”, Prince, CEO of BlockFi tweeted on Tuesday.
As per the opinion of crypto analysts, it’s been a rough year for crypto lenders since most of the digital assets are losing their value significantly. Last February, the US securities and exchange commission charged BlockFi as they failed to register their retail crypto lending products. In June, the co-founders of BlockFi announced that the BlockFi company would lay off its staff by 205 due to the negative impact of the crypto market conditions.
This year is very important for BlockFi and last week, Prince announced that “BlockFi had also been forced to liquidate a large client that failed to meet its obligations on an overcollateralized loan”. Since they haven’t mentioned the name of the specific client, the investors have guessed the solvency of BlockFi and Three Arrows Capital, which is another largest crypto lending platform.
Following the announcement of the future collaboration of BlockFi and FTX by the BlockFi CEO, Prince, the CEO of FTX, Sam Bankma – Fried tweeted, “the cryptocurrency exchange has a responsibility to bail out struggling companies during this unrelenting bear market. Even if we didn’t spark the crypto market contagion. I think that’s good for the ecology and want to help it thrive.”.