Home
News
The cryptocurrency lender and FTX US have into binding agreements for a $400 million revolving credit facility, which will be junior to all customer funds.
Client assets will be a priority
BlockFi CEO and founder Zac Prince said on Saturday that client assets will be given priority as part of the agreement, adding to a previous term sheet for a US$250 million revolving credit facility from the cryptocurrency exchange.
Based on performance goals, the cryptocurrency exchange also has the option to buy BlockFi for around US$240 million.
According to Prince, BlockFi has not used this credit facility yet and is still running all of its goods and services properly.
However, he added, the cryptocurrency lender did post losses of roughly US$80 million, a small portion of what other lenders have disclosed publicly.
According to Prince, “an increase in customer withdrawals” from BlockFi’s platform followed news that Celsius Network had suspended withdrawals and transfers.
If only the investors in the senior-most tranche of the most recent financing by the firm are compensated by FTX’s option to purchase BlockFi, that is not immediately evident.
According to a CoinDesk story of a leaked discussion between the U.S. asset management and its investors, BlockFi investor Morgan Creek earlier stated it was planning a counter bid since FTX’s term sheet would allow it to purchase the cryptocurrency lender “for basically zero price.”
Prince stated on Saturday, “I am really sorry that an improperly leaked call resulted in reporting on potential negative repercussions to the BlockFi team. These remarks were later reversed since they were only one person’s own speculation.
Volatility in the cryptocurrency market and market occurrences like the Celsius and Three Arrows Capital (3AC) withdrawal freeze hastened withdrawals on the BlockFi platform in June and resulted in a 20% reduction in employees.
In an email sent outside of regular U.S. business hours, Forkast asked Morgan Creek for a remark, but the company did not answer right away.
ALSO READ: Wanna Survive Long Enough To See The Bull Run In Crypto Market? Do These
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
