FTX, a leading global crypto exchange, has provided BlockFi with a $250 million revolving credit line to backstop the firm during a broad decline in crypto markets.
In a series of tweets, BlockFi founder and CEO Zac Prince revealed the funding that will stabilize the balance sheet of the crypto firm.
Today @BlockFi signed a term sheet with @FTX_Official to secure a $250M revolving credit facility providing us with access to capital that further bolsters our balance sheet and platform strength.
— Zac Prince (@BlockFiZac) June 21, 2022
Prince said the credit facility is intended to be contractually subordinated to all client balances across all account types describing the agreement as a landmark event that reinforces BlockFi’s commitment to serve its clients and ensure all funds are safeguarded.
FTX founder and CEO Sam Bankman-Fried tweeted they are partnering with BlockFi to help them “navigate the market from a position of strength” adding that “sometimes leadership means acting decisively and that’s what BlockFi did: removing troublesome counterparties _before_ they become a problem, and adding cash _before_ it was necessary.”
“We take our duty seriously to protect the digital asset ecosystem and its customers,” said Bankman-Fried
The announcement should remove any concerns about BlockFi being able to service its clients and temper worries about crypto contagion.
In a release, Bankman-Fried stated:
“BlockFi’s team has always demonstrated a strong bias towards prudent risk management and swift action. Protecting customer assets is their top priority which allows them to operate from a position of strength. FTX is excited to partner with BlockFi, a leader in the digital asset ecosystem, to offer first-class products to customers.”
4) BlockFi is financially strong; all operations are normal, as they always have been, and assets are safe.
— SBF (@SBF_FTX) June 21, 2022
The term sheet is contingent upon the execution of definitive documents and both companies are expecting to execute definitive documentation, to be completed in the coming days.