Crypto lender BlockFi has secured a deal with crypto exchange FTX for US$250 million in revolving credit, as tweeted by BlockFi CEO Zac Prince this week:
Injection of Strength
Under the terms of the agreement, BlockFi will have access to capital amid the current massive downturn in the crypto market. FTX founder and CEO Sam Bankman-Fried said in a return tweet that the facility would enable BlockFi to “navigate the market from a position of strength”.
Prince has indicated that the proceeds from the loan are contractually subordinated to all client balances, meaning that BlockFi will satisfy its obligations on client accounts before paying FTX.
The news comes amid a difficult time for BlockFi, which recently had to cut its staff by 20 percent. Last week, Celsius, one of BlockFi’s crypto lending competitors, froze account withdrawals, swaps, and transfers to help it through the crypto winter, reportedly transferring US$320 million in cryptocurrencies to FTX before doing so.
Deal May Lead to Future Partnership
Along with the announcement of the line of credit, Prince hinted that the deal could open the door to a full-fledged partnership between FTX and BlockFi. He said on Twitter:
This agreement also unlocks future collaboration and innovation between BlockFi and FTX as we work to accelerate prosperity worldwide through crypto financial services.
Zac Prince, CEO, BlockFi
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