Sam Bankman-Fried’s FTX commits $250M to BlockFi: read the details here
- The proceeds of the credit line will bolster BlockFi balance sheet.
- BlockFi is building a bridge between cryptocurrencies and traditional financial & wealth management products.
- The term sheet is a great step towards collaboration between FTX and BlockFi.
Two leading global crypto financial services companies BlockFi and FTX have today signed a term paper securing a $250 million revolving line of credit. This will provide BlockFi with access to more capital.
The agreement comes at a time when the crypto market has been quite volatile and several cryptocurrency service providers like Celcius have been faced with the risk of insolvency.
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After signing the term paper, the CEO and co-founder of BlockFi, Zac Prince, tweeted saying that the “agreement also unlocks future collaboration and innovation between BlockFi & FTX” as the two work to “accelerate prosperity worldwide through crypto financial services.”
Proceeds of the credit line
According to a tweet by Zac Prince, the proceeds of the revolving credit line will be contractually subordinated to all client balances across all account types at BlockFi and will be used accordingly to boost BlockFi’s balance sheet, to ensure that the company remains stable over the long-term. The BlockFi accounts under consideration here include the BlockFi Interest Account, the BlockFi Personalized Yield, and the BlockFi Loan collateral. The same was also affirmed by another tweet by the BlockFi team.
The CEO and co-founder of FTX on his side commented and said:
“BlockFi’s team has always demonstrated a strong bias towards prudent risk management and swift action. Protecting customer assets is their top priority which allows them to operate from a position of strength. FTX is excited to partner with BlockFi, a leader in the digital asset ecosystem, to offer first-class products to customers.”