At a time when a significant number of crypto platforms are struggling to remain afloat, BlockFi hopes the new credit line would help them secure user’s funds
BlockFi, a cryptocurrency exchange and digital wallet service provider, has secured a $250 million credit from leading crypto platform FTX.
BlockFi has signed a term sheet with FTX crypto exchange to secure a $250 million revolving credit facility. A revolving credit facility is a type of credit that enables you to withdraw money, use it to fund your business, repay it and then withdraw it again when you need it.
Zac Prince, the CEO of BlockFi, confirmed the news in a Twitter thread, claiming the new flow of capital would bolster the firm’s balance sheet and strengthen the platform. Prince said:
“The proceeds of the credit facility are intended to be contractually subordinated to all client balances across all account types (BIA, BPY & loan collateral) and will be used as needed.”
The $250 million credit for BlockFi comes amid market-wide turmoil that has seen many crypto firms cut their workforce and make crucial changes to their operations to remain afloat. Many crypto platforms also had to shut their operations and pause withdrawals owing to the bearish dominance in the market.
Prince lauded the efforts of his team during the ongoing volatility in the crypto market and stated that the new line of credit will be put toward safeguarding users’ funds across all accounts type.
BlockFi was fined $100 million in February this year for its high-yield interest accounts, which were deemed as security products by the United States Securities and Exchange Commission.