BlockFi’s CEO – Zac Prince – took it to Twitter to announce the term sheet deal with FTX to obtain a revolving credit worth $250 million. The company aims to utilize the funds to strengthen its balance sheet and operations.
- The latest crypto market slumps brought pain to numerous crypto lenders, and BlockFi was among those affected, resulting in reducing its number of employees by 20% (approximately 170 people).
- It seems that was not enough, as the company had to go for a $250 million-worth revolving credit facility from SBF’s FTX Exchange.
- Prince said the idea is to “bolster our balance sheet and platform strength” before explaining that the proceeds “are intended to be contractually subordinated to all client balances across all account types (BIA, BPY & loan collateral) and will be used as needed.”
- A revolving credit facility is a credit allowing the receiver to withdraw money, use it to fund the business operations, repay it, and withdraw again if needed.
- Prince also noted that FTX and BlockFi could explore further collaborations after signing the aforementioned agreement.
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 Prince (@BlockFiZac) June 21, 2022
- This deal comes just a few days after the CEO of FTX – Sam Bankman-Fried – said large players like the crypto company he runs should be helping other industry projects in times of uncertainty and challenges.