- Blockfi announced a massive credit facility secured from crypto exchange FTX.
- The deal is worth $250 million according to CEO Zac Prince.
- Blockfi plans to use the funds to bolster its balance sheet and protect client assets.
- FTX boss Sam Bankman-Fried previously said that his company planned to step in and stem the contagion in crypto.
Blockfi and major crypto exchange FTX have agreed on a deal worth $250 million according to tweets from Zac Prince, the CEO of the crypto lending giant. The agreement provides Blockfi with a credit facility to help the company solidify its balance sheets amid harsh market conditions.
Zac Prince added that the funds are also earmarked to protect customer funds and assets should the need arise.
The proceeds of the credit facility are intended to be contractually subordinate to all client balances across all account types (BIA, BPY & loan collateral) and will be used as needed.
Blockfi, like other crypto lenders in the industry such as Babel and Celsius, has experienced the impacts of the market slump. The company recently announced a 20% cut in its workforce due to a significant shift in macroeconomic conditions.
Other companies like Coinbase and Gemini to name a few also revealed a reduction in employee count as the industry braces up for a crypto bear cycle and a looming U.S. recession.
Blockfi was also one of the firms that liquidated the bitcoin-collateralized loan taken by crypto hedge fund Three Arrows Capital after the company failed to meet a margin call on its position.
CEO Zac Prince opined that the $250 million deal will allow the company to better weather the storm and survive the latest market cycle. Prince also expects that the agreement will facilitate future collaborations between the crypto lender and the mammoth exchange.
This agreement also unlocks future collaboration and innovation between BlockFi & FTX as we work to accelerate prosperity worldwide through crypto financial services. This is a significant step forward in our commitment to the strength and accessibility of crypto markets.
Blockfi, Voyager Digital, And Others Backed By SBF
As EthereumWorldNews previously reported, FTX CEO Sam Bankman-Fried said that his firm would consider stepping in even if it meant taking a few losses. SBF added that safeguarding the crypto industry is the top priority in such conditions as we’re currently experiencing.
SFB-led firms have indeed backed firms when they needed support in the past. Last year, FTX bolster Asian crypto platform Liquid with a $120 million loan after a massive hack. Voyager Digital also secured a $485 million credit line from SBF-led Alameda research.
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