BlockFi, a cryptocurrency firm, signed a $250 million revolving credit agreement with FTX, a major cryptocurrency exchange . According to Zac Prince, BlockFi’s Chief Executive Officer, the credit facility provides them with access to capital that ‘further bolsters our balance sheet and platform strength’.
With the agreement, BlockFi will be able to access capital during a rout in the digital currency market. The company announced last week that it would reduce its headcount by about 20%, as well as reduce its marketing spend and executive compensation.
“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,” Prince commented.
He added: “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.”
The US Securities and Exchange Commission (SEC) fined BlockFi $100 million in February this year for its high-yield interest accounts that were deemed security products. According to a New York Post report citing sources with direct knowledge of the negotiations, FTX has withdrawn from discussions with MLB outfit Los Angeles Angels to offer a jersey patch.
Crypto Layoffs
Last week, Coinbase announced that it was pruning its workforce by 18% in preparation for a recession it says could lead to another crypto winter. Two weeks earlier, Gemini said it was cutting its staff base by 10%, citing “current macroeconomic and geopolitical turmoil.” In addition, Crypto.com said it was letting go of 260 workers, or 5% of its corporate workforce.
