Crypto lending platform BlockFi has signed a term sheet with leading crypto exchange FTX to secure a $250 million revolving credit facility, BlockFi CEO Zac Prince announced June 21.
— Zac Prince (@BlockFiZac) June 21, 2022
According to Prince, this agreement will offer BlockFi access to additional capital, which the firm will use to strengthen its balance sheet.
The proceeds of the credit facility will contractually be subordinate to all client balances across all BlockFi accounts. These include BlockFi Interest Account (BIA), BlockFi Personalized Yield (BPI), and BlockFi loan collateral. BlockFi intends to use the proceeds to bolster its operations as the bear market continues ravaging the crypto space.
BlockFi seeks to keep user funds safe
Prince noted that this deal underscores BlockFi’s commitment to serving its clients and ensuring the safety of their funds.
In the past week, Celsius Network suspended withdrawals, swaps, and transfers on its platform due to liquidity issues. In a ripple effect, crypto hedge fund Three Arrows Capital (3AC) faced liquidation after failing to meet margin calls from lenders. According to a Financial Times report, BlockFi was among the lenders that liquidated 3AC.
While BlockFi did not confirm its role in liquidating 3AC, Prince said the company liquidated a large counterparty after failing to meet margin calls. He did not reveal the name of the said counterparty. However, Prince claimed BlockFi was among the first lenders to liquidate the third party, and that acting quickly helped keep customer funds safe.