Zac Prince, the Chief Executive Officer of the crypto lending and trading platform BlockFi recently shared a crucial update with his 71k followers on Twitter. He explained how the company “broadened the scope of the initial deal for the benefit of major BlockFi stakeholders.”
— Zac Prince (@BlockFiZac) July 1, 2022
Prince revealed that on June 30, crypto lender signed definite agreements, subject to shareholder approval, with the exchange platform FTX US for:
- Another $400 revolving credit facility
- An option to acquire BlockFi at a variable price of up to $240 million
Interestingly, TheCoinRise recently covered the possibility of FTX’s plans to purchase a stake in the company. As per the announcement, the acquisition would be based on performance triggers. The CEO said that along with other possible considerations, it represents a total value of up to $680 million. He added:
“We haven’t drawn on this credit facility to date and have continued to operate all our products and services normally. In fact, we raised interest rates, effective today [June 1].”
BlockFi suffered in the current market events
Prince cited crypto market volatility, and ongoing market events related to Celsius Network and Three Arrow Capital, as the major factors that negatively impacted BlockFi. Notably, on June 12, Celsius halted client withdrawals from its platform. The BlockFi CEO said that 3AC spread further panic in the crypto market. He also noted further fear caused by 3AC by adding:
“While we were among the first to fully accelerate our overcollateralized loan to 3AC, as well as liquidate and hedge all collateral, we did experience ~$80M in losses, which is a fraction of losses reported by others.”
Prince said that the company’s fundamental goal is to protect its client funds. He said that it is not only the right thing to do but also benefits the market health and accelerates crypto adoption.
BlockFi CEO said that FTX US suits as a great partner for the company as its platform and products are highly complementary to that of BlockFi.