crypto
Bulletins

​BlockFi lands a $250M credit line from FTX

FTX CEO Sam Bankman-Fried said the backing will allow BlockFi to “navigate the market from a position of strength.”

Sam Bankman-Fried, co-founder and chief executive officer of FTX, sitting in a chair

"I do feel like we have a responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion," Bankman-Fried said recently.

Photo: Lam Yik/Bloomberg via Getty Images

Crypto lender BlockFi has secured a $250 million revolving credit line from FTX, a deal that comes as a broader market meltdown has forced other lenders to freeze withdrawals.

Sam Bankman-Fried, co-founder and CEO of FTX, tweeted Tuesday that the exchange is entering the partnership to allow BlockFi to “navigate the market from a position of strength.” BlockFi Founder and CEO Zac Prince said the credit "further bolsters our balance sheet and platform strength."

But the agreement comes as crypto lenders Celsius Network and Babel Finance have recently suspended customer withdrawals, citing pressures on their liquidity. That has raised questions about BlockFi's position. Prince acknowledged on Thursday that BlockFi liquidated an unnamed "large client" that failed to meet its obligations but said BlockFi would "continue to actively lend and operate normally across our global suite of products and services."

BlockFi also recently laid off 20% of its staff in response to a "dramatic shift in macroeconomic conditions." The company has raised about $1 billion from venture capital investors over its five years in business, according to Crunchbase.

BlockFi's "customer assets are appropriately managed, with no debt/risk from [Three Arrows Capital], Celsius, etc," Bankman-Fried tweeted. The credit line will be “contractually subordinate to all client balances across all account types,” according to Prince.

Bankman-Fried recently suggested that large, well-financed crypto companies such as FTX should help contain the losses of the recent crypto sell-off.

"I do feel like we have a responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion," he told NPR. "Even if we weren't the ones who caused it, or weren't involved in it. I think that's what's healthy for the ecosystem, and I want to do what can help it grow and thrive."

Alameda Research, a crypto company also run by Bankman-Fried, recently extended two credit lines, one for about $200 million and the other for about 15,000 bitcoin, to crypto broker Voyager Digital.

Ryan Deffenbaugh
Ryan Deffenbaugh is a reporter at Protocol focused on fintech. Before joining Protocol, he reported on New York's technology industry for Crain's New York Business. He is based in New York and can be reached at rdeffenbaugh@protocol.com.
sam bankman-friedftxblockficryptocurrencycrypto
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