CREDIT FACILITY FOR BLOCKFI WOULD POWER ITS BALANCE SHEET AND GENERATE REVENUE
BlockFi founder and CEO Zac Prince said via Twitter on Tuesday that companies had signed a term sheet, "which provides us with revenue that strengthens our balance and power on the platform."
He said the credit line was "intended to be less contractual for all client balances in all types of accounts."
BlockFi, founded in 2017 and based in Jersey City, N.J., raised about $ 1 billion in business support, most recently in January 2022, according to CrunchBase.
Cryptocurrencies have skyrocketed over the past two years with other assets under consideration, but now many crypto companies have been struggling to stay afloat after a crypto selloff devastated nearly $ 2 billion in market value. The price of bitcoin fell sharply to $ 17,602 on Saturday, down more than 70% since its peak November, before rising more than $ 21,000 on Tuesday.
In June, Celsius Network LLC abruptly suspended withdrawals and hired lawyers for the reorganization. An Asian lender named Babel Finance has also shut down all customer withdrawals and redemption. BlockFi, Coinbase Global Inc., Gemini Trust Co. and others have recently been forced to expel.
On Thursday, Mr. Prince said via Twitter that BlockFi has eliminated consumer debt overcollateralized margin. He did not name the client or the size of the loan.BLOCKFI
In February, BlockFi paid a $ 100 million fine to the Securities and Exchange Commission to settle claims that it allowed nearly 600,000 users to earn interest by lending their goods to other traders for violating investment protection laws. It was the largest fine agreed upon by the cryptocurrency company. BlockFi also stopped providing U.S. accounts.
The announcement by the credit bureau comes after FTX founder and chief executive Sam Bankman-Fried told National Public Radio that companies like FTX should help struggling crypto companies.
"I feel like we have a responsibility to think seriously about getting in, even if we lose ourselves, to prevent infection," he said. Bankman-Fried told NPR this weekend.
Earlier this month, another crypto company of Mr. Bankman-Fried, a trading company Alameda Research, extends two lines of credit, one costing $ 200 million and the other costing 15,000 bitcoins, a crypto retailer and service provider Voyager Digital Ltd.
FTX is valued at $ 32 billion, according to PitchBook, and participated in a few deals in June alone.
Earlier this month, FTX acquired a Canadian crypto exchange called BitVo for an undisclosed amount. On Monday, the U.S.-based FTX segment, FTX US, acquired the broker-dealer services company Embed Financial Technologies Inc. Terms were not disclosed. Embedding will be combined with FTX fixed stock and ETF trading product, the company said.
FTX Ventures was part of a $ 60 million crypto-trading mobile Delphia service fund, as well as a $ 2.5 million investment in DAO, or a private organization, called Samudai.