BlockFi Secures 250M Credit Facility from FTX to Bolster Balance Sheet

New Jersey-based crypto lending platform BlockFi has signed a term sheet with FTX to secure a $250 million revolving credit facility. Zac Prince, BlockFi’s CEO, tweeted this news earlier today, saying the non-binding agreement will offer BlockFi access to additional capital. BlockFi also announced in a subsequent press release.

According to Prince, the $250 million would go toward strengthening BlockFi’s balance sheet and platform. He added that BlockFi intends for the proceeds of the credit facility to be subordinate to client balances across all accounts. These include BlockFi Interest Account, BlockFi Personalized Yield, and BlockFi loan collateral.

Prince continued,

Today’s landmark announcement reinforces the commitment that BlockFi has to serving its clients and ensuring their funds are safeguarded.

He further noted that this development opens a door for future collaboration and innovation between BlockFi and FTX. Prince labeled the agreement a significant step forward in BlockFi’s continued commitment to the strength and accessibility of cryptocurrency markets.

According to the press release, the term sheet is subject to changes upon the execution of definitive documents. BlockFi and FTX expect to complete this process over the next few days.

Striving to Keep Customer Funds Safe

The agreement between BlockFi and FTX comes amid a downturn in the crypto market. While global macro factors have a part to play in the rout, recent events in the crypto industry exacerbated it.

First came the collapse of the TerraUSD (UST) stablecoin, which wiped off over $40 billion from the market. Before the UST fiasco could die down, Celsius Network faced liquidity issues and paused withdrawals, swaps, and transfers. Three Arrows Capital (3AC) followed suit soon afterward after failing to meet lenders’ margin calls.

With so much negative news in the crypto space, Prince praised BlockFi for operating normally despite the bearish sentiment.

Assuring users that everything is running smoothly at BlockFi, the executive said,

Bitcoin live price
price change

FTX CEO Sam Bankman-Fried also lauded BlockFi’s team for demonstrating a strong bias towards prudent risk management and swift action. He added that BlockFi prioritizes the protection of customer funds. According to him, this practice helps the firm operate from a position of strength.

Stay up to date with our latest articles