Crypto News

BlockFi CEO provides more details on FTX’s $250M revolving credit facility

Yesterday, popular cryptocurrency lending company BlockFi announced a $250 million revolving credit facility from cryptocurrency exchange FTX to strengthen its balance sheet and bolster its position amid the bear market.

While the CEO – Zac Prince – didn’t delve into the specifics of the credit facility, he did note that the proceeds would ensure customers got their funds back if the company went into liquidation during the meltdown.

The announcement sparked concerns, with many wondering if BlockFi, like other lending platforms, was experiencing liquidity issues and why the company would need a loan that wasn’t intended for expansion.

An offensive and defensive move

However, Prince spoke to Bloomberg in a phone interview and provided more details about the loan facility. BlockFi’s CEO said the loan would help the company protect customers’ funds as the market remains volatile.

He said the strategic partnership with FTX was “equal parts offensive and defensive move.” He noted that people with “untrained eyes” would think BlockFi has a similar business model to other companies, but those with “trained eyes” understand that “it’s day and night.”

“We felt it was a smart, offensive, and strategic decision for BlockFi to pad the tally with a big number and tell everyone about it,” he said.

Prince: Everything works

BlockFi’s CEO said the company still has a great relationship with all of its banking partners. According to him, before the Terra LUNA crash, the crypto lender had two Bitcoin-covered credit facilities with two banks and borrowed partial amounts. Although the company still has these facilities with the banks, the amount drawn is currently zero.

He also confirmed that the company received many withdrawal requests last week amid fears, but the number is down 88% from its peak and the decline is expected to continue. That being said, he found that “everything works the way it’s always worked.”

Meanwhile, Zac Prince also commented on the current market conditions. He believes that at some point in the future, when the crypto market turns bullish, people will look back and say, “That was a phenomenal time to buy,” because there’s still a lot of growth potential for crypto assets.

Featured image courtesy of Money INC

Source: Crypto News Deutsch

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