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Blockfi crypto lender has provisionally secured an ftx $250 million revolving credit facility with access to more capital as he tries to consolidate liquidity and keep the chill from his fellow lender celsius.
CEO Zac Prince confirmed signing a nonbinding term sheet with FTX to bolster its balance sheet and make its platform more resilient amidst the current market volatility
The lending platform, infamous for spats with securities regulators at the federal levels in the United States, has thus far weathered the crypto winter storm without significant disruptions to customers. Prince lauded the efforts of the company’s risk management protocols, team, and platform in a Twitter thread Tuesday in safeguarding user funds, even as competitor Celsius faces tough questions after pausing withdrawals for its 1.7 million customerspress release confirmed that all funds from the credit line are subordinate to client balances across all types of BlockFi accounts.
FTX CEO lauds elimination of counterparty risk
The CEO has also indicated that this may be the first step toward greater collaboration with the crypto exchange FTX. FTX CEO Sam Bankman-Fried applauded Block.Fi’s risk policies and management in a Twitter thread, highlighting how the company acted decisively and preemptively to liquidate the positions of Three Arrows Capital and other counterparties failing to meet lender margin calls. Genesis, another company in the area of cryptoal financial services, has also liquidated three arrows' position. Neither the prince nor the banker discussed the interest rate on the newline of credit.
BlockFi struggles to raise $100M
BlockFi’s move to secure lending comes after it to raise $100 million at a valuation of $1 billion, sparking fears that it could go down the same route as Celsius, which recently insolvency experts to solve its financial woes and has not yet supplied a date for the resumption withdrawals, swaps, and exchanges. New Jersey-based BlockFi has any form of collaboration between the two companies and allayed fears that it holds staked ETH, a derivative token at the heart of Singapore-based Three Arrows Capital’s recent woes. BlockFi had previously raised $350 million at a valuation of $3 billion in March 2021.
The list of conditions signed to obtain the FTX line of credit depends on the binding documents still to be drafted by both companies.
