Struggling digital assets company BlockFi has received a $250 million credit facility from FTX Derivatives Exchange as it looks to survive the current downturn in the crypto industry.
BlockFi CEO Zac Prince announced on Tuesday that the company is now on track to bolster its balance sheet and general platform strength.
The utilization of the new credit facility will be primarily centred on being deployed as a contractually subordinate capital to “all client balances across all account types (BIA, BPY & loan collateral)”, with Zac promising that the funds “will be used as needed.”
FTX’s latest action is described as a rescue mission in restoring the confidence of the recent crash of the crypto market. Over the past few weeks, the market was being challenging for digital currency asset providers, particularly crypto lenders. Celsius Network halted its withdrawals and virtually all of its core operations and said that it would need more time to resume its operations recently. In its efforts to resolve its current woes, Celsius has started repaying its outstanding loans, sending $10 million in DAI stablecoin to Compound.
While BlockFi’s woes are not as pronounced as Celsius Network’s or Babel Finance’s, the firm has unveiled plans to cut operational costs by laying off 20% of its workforce. Zac commented on the secured credit facility and said the funds would bolster its working relationship and collaboration with FTX.
“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,” Zac said in the tweet, “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.”
Zac reiterated BlockFi’s commitment to its customers, adding that it will weather this current storm as it has always.
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