BlockFi will not accept GBTC as collateral anymore: report

on Jul 12, 2022
  • BlockFi is reportedly moving away from accepting GBTC as collateral.
  • The crypto lender is also finalizing the unwinding of some pending exposure.
  • The firm’s CEO Zac Prince says the lender is operational and should not be lumped with struggling rivals.

Crypto lending firm BlockFi has reportedly decided to stop accepting the Grayscale Bitcoin Investment Trust (GBTC) as collateral.

Sources privy to the development told crypto publication The Block that the crypto lender has also unwound its GBTC positions.

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Other than that, it will also not accept GBTC as collateral – a move ostensibly meant to help the platform maintain the trajectory towards evading what has befell rivals across the industry.

BlockFi’s exposure to contagion

Over the past few weeks, multiple crypto firms, including lenders Celsius Network, Voyager Digital and Vauld, have hit turmoil amid broader contagion going back to the collapse of TerraUSD and LUNA and the dramatic disintegration of massively leveraged crypto hedge fund Three Arrows Capital.

BlockFi also had to seek a credit facility to stay afloat, which billionaire Sam Bankman-Fried provided via his crypto exchange FTX. The firm has thus remained operational, though uncertainty continues to swirl even as the market grappled with just how exposed these companies were to Three Arrows.

CEO Zac Prince has pointed to the fact that BlockFi continues to operate smoothly even as others folded. He says it is wrong to view the lender in the same light as the embattled Voyager or Celsius.

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