BlockFi, a cryptocurrency exchange and digital wallet service provider, has secured $250 million in credit from leading crypto platform FTX.
BlockFi has signed a term sheet with the FTX crypto exchange to secure a $250 million revolving credit facility. A revolving credit facility is a type of credit that enables you to withdraw money and use it to finance your business, pay it off and then withdraw it again when you need it.
BlockFi CEO Zach Prince confirmed the news in a Twitter thread, claiming that the new influx of capital will boost the company’s balance sheet and strengthen the platform. Prince said:
“The proceeds from the credit facility are intended to be contractually dependent on all customer balances across all account types (BIA, BPY and loan guarantees) and will be used as needed.”
The $250 million credit to BlockFi comes amid market turmoil that has led many crypto companies to downsize their workforce and make crucial changes to their operations to stay afloat. Many crypto platforms also had to close their operations and pause withdrawals due to the bearish market dominance.
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Prince praised his team’s efforts during the ongoing fluctuations in the cryptocurrency market and stated that a new line of credit will be put in place to protect user funds across all account types.
BlockFi was fined $100 million in February of this year for high-yield interest accounts, which the US Securities and Exchange Commission deemed a security product.