Crypto lender BlockFi revealed that it has received a $250 million credit facility from crypto exchange FTX.
BlockFi receives $250M credit Facility
On Twitter, BlockFi CEO Zac Prince announced the news, explaining that the credit facility funding strengthens the company’s balance sheet. The announcement comes three days after The New York Post reported that BlockFi failed to raise capital while providing a steep discount on its valuation, raising concerns in the crypto industry.
According to Prince, the credit facility proceeds will be contractually subordinated to all client balances across all account types (BIA, BPY, and loan collateral) and used as needed. The agreement also opens the door to future collaboration between BlockFi and FTX.
— Zac Prince (@BlockFiZac) June 21, 2022
Large client failed to meet its obligations
BlockFi also stated on Thursday that a significant client had failed to meet its obligations on a margin loan. The client’s name was not revealed, but the Financial Times reported that BockFi was among the entities who liquidated at least some of their positions with Three Arrows Capital.
The lending platform was already having a hard time as it recently slashed its workforce by 20%. BlockFi founders Zac Prince and Flori Marquez said in a blog post that “market conditions that have had a negative impact on our growth rate” drove their decision to make the job cuts.