Digital assets lending protocol, BlockFi has turned to FTX Derivatives Exchange for a bailout as it has secured the sum of $250 million in revolving credit to bolster its operations. Chief Executive Officer, Zac Prince made the announcement via his official Twitter account today.
Prince said the new capital will be very instrumental in boosting the outlook of its balance sheet as it also works toward achieving empowering its platform amidst the ongoing crypto market meltdown. Prior to the period when this loan was secured, BlockFi had been taking precautions to reduce its operating costs by cutting down on its staff strength by at least 20%.
The fears of a very long protracted crypto winter have not just informed the lending platform’s recent decisions, but it is guiding how it will utilize the newly issued credit line. Prince commended the team at BlockFi for navigating the latest market onslaught with the sole aim of catering to the platform’s customers who could be impacted the most.
“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,” Prince said in the tweet, “Throughout the market volatility of the last several weeks, I’m incredibly proud of how our team, platform, and risk management protocols have performed. Today’s landmark announcement reinforces BlockFi’s commitment to serving its clients and ensuring their funds are safeguarded.”
BlockFi and FTX Cementing Future Collaborations
By extending the credit facility to BlockFi, FTX has shown great faith in the crypto lenders’ business model. In recognition of this, Zac Prince said in his tweet that “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.”
Besides BlockFi, the most prominent crypto lenders, particularly Celsius Network are jostling for solutions that will not only make them lift the suspension on withdrawals, but also help chart a sustainable path for the future.
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