- BlockFi receives a $250 million umbrella loan as per CEO Prince.
- BlockFi revealed early last week that it was cutting 20% of its personnel.
BlockFi and FTX have teamed together to provide a new credit line. Cryptocurrency exchange FTX has granted BlockFi a $250 million credit facility, according to CEO Zac Prince, who announced it on Twitter on Tuesday. BlockFi receives a $250 million umbrella loan as per Prince, who stated the agreement would help the company’s financial sheet and platform robustness.
Today @BlockFi signed a term sheet with @FTX_Official to secure a $250M revolving credit facility providing us with access to capital that further bolsters our balance sheet and platform strength.
— Zac Prince (@BlockFiZac) June 21, 2022
Unlock Future Collaboration and Innovation
Credit facilities like this allow enterprises to have better control over the amount of debt they take on and the length of their repayment terms than conventional loan arrangements. A deeper working connection between BlockFi and FTX is implied by Prince’s statement that the arrangement would “unlock future collaboration and innovation between BlockFi and FTX.”
BlockFi revealed early last week that it was cutting 20% of its personnel, which raised doubts about its solvency. A Financial Times investigation disclosed that the firm’s debt to the famed crypto hedge fund was liquidated for the second time in less than a week. Despite BlockFi’s assurances that no customer money has been affected by the Three Arrows collapse, suspicions of a liquidity issue have continued to circulate online. Many people are concerned that the company is in a similar situation as Celsius. This competitor lending platform has been accused of not having enough liquid assets to pay its depositors in full.
BlockFi’s finances may be in trouble based on a leaked balance sheet. According to a leaked financial statement, more than $285 million has been lost over the previous two years. Such speculations might also explain why the company is having difficulty obtaining investment in its newest financing round, despite cutting its value from the $3 billion it attained in March last year to $1 billion today.
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