Crypto Exchange FTX Bails Out BlockFi With $250 Million Revolver
After a weekend of carnage and premature obituaries, crypto markets are rising phoenix-like (for now), helped by news that BlockFi has been bailed out by crypto exchange FTX.
BlockFi CEO Zac Prince took to Twitter to explain the deal:
— Zac Prince (@BlockFiZac) June 21, 2022
The proceeds of the credit facility are intended to be contractually subordinate to all client balances across all account types (BIA, BPY & loan collateral) and will be used as needed.
Throughout the market volatility of the last several weeks, I’m incredibly proud of how our team, platform and risk management protocols have performed. Today’s landmark announcement reinforces BlockFi’s commitment to serving its clients and ensuring their funds are safeguarded.
This agreement also unlocks future collaboration and innovation between BlockFi & FTX as we work to accelerate prosperity worldwide through crypto financial services. This is a significant step forward in our commitment to the strength and accessibility of crypto markets.
To @BlockFi clients:
We are here for you. Our team is battle tested and has weathered many storms over the years, which only makes us stronger and more resilient as we navigate today’s market environment.
We look forward to sharing more details about future plans and initiatives to support the industry shortly!
As a reminder, BlockFi was fined $100 million in February this year for its high-yield interest accounts, which were deemed as security products by the United States Securities and Exchange Commission.
Why would FTX do this? @TheSkyhopper had some inisghts:
This is a cunning move by @SBF_FTX as well. As there are probably certain default triggers, FTX can take over @blockfi in whole of those terms trigger. 5 billion valuations of equity … not just held hostage by in theory of $1 of secured debt.@BainCapVC rekt.
— TheSkyhopper (@TheSkyhopper) June 21, 2022
Interestingly as FTX announces this deal with BlockFi, a New York Post report, citing sources with direct knowledge of the negotiations, claims the crypto exchange has withdrawn from talks to offer a jersey patch to the MLB outfit Los Angeles Angels.
Finally, form NYSE president and current VC investor Tom Farley discussed the crypto market on CNBC this morning, noting that – during a number of calls with crypto CEOs – “this weekend was the capitulation… CEOs are scrambling to recapitalize…”
“I don’t know if $17,000 is the bottom or a bottom. Maybe we’ll retest those lows,” says Tom Farley on #bitcoin. “When the tide goes out, you’ll see the people who were buying last week into this week, there were some really good opportunities.” pic.twitter.com/w2OTzuC5Bi
— Squawk Box (@SquawkCNBC) June 21, 2022
So was the $17,000 handle ‘the’ low or just ‘a’ low?
Tue, 06/21/2022 – 09:15