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BlockFi Receives $250M Credit Facility From FTX

The proceeds will be used to fulfill client balances across all accounts.

Updated May 11, 2023, 6:49 p.m. Published Jun 21, 2022, 12:26 p.m.

Crypto lending platform BlockFi announced that it has secured a $250 million revolving credit facility from FTX, BlockFi CEO Zac Prince said in a tweet on Tuesday, and the company subsequently announced in a press release.

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

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Prince said the move “bolsters our balance sheet and platform strength.” He added that "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."

This is not the first time FTX CEO Sam Bankman-Fried has stepped in to bail out a major crypto company impacted by the recent market downturn. Last week, crypto broker Voyager Digital (VOYG) secured a revolving line of credit with Bankman-Fried-founded quant trading shop Alameda Research.

Though it is now in the position of backstopping a broader market crash, FTX is reportedly one of the firms that liquidated Celsius – the troubled decentralized crypto lending platform that was forced to halt all user withdraws last week. Celsius, one of BlockFi’s competitors, reportedly ran out of funds to repay depositors due to a series of risky decentralized finance bets.

In the press release, BlockFi said the credit facility is contingent on the execution of "definitive documents," which the two companies expect to be completed in "the coming days."

The agreement comes during a downturn for crypto markets and the fall of stablecoin UST and the aforementioned Celsius.

Last week, Prince tweeted that BlockFi had also been forced to liquidate a large client that “failed to meet its obligations on an overcollateralized loan.” The statement – which didn’t name a specific client – came amid speculation surrounding the solvency of Three Arrows Capital, a major crypto investment firm. Just a few days earlier, BlockFi announced it was cutting about 20% of its workforce, or roughly 170 jobs.

BlockFi can confirm that we exercised our best business judgment recently with a large client that failed to meet its obligations on an overcollateralized margin loan. We fully accelerated the loan and fully liquidated or hedged all the associated collateral.
— Zac Prince (@BlockFiZac) June 16, 2022

UPDATE (June 21, 12:53 UTC): Added context and background throughout.

UPDATE (June 21, 13:05 UTC): Added information about BlockFi job cuts.

BlockFi FTX Credit

Parikshit Mishra

Parikshit Mishra is CoinDesk's Regional Head of Asia, managing the editorial team in the region. Before joining CoinDesk, he was the EMEA Editor at Acuris (Mergermarket), where he dealt with copies related to private equity and the startup ecosystem. He has also worked as an Senior Analyst for CRISIL, covering the European markets and global economies. His most notable tenure was with Reuters, where he worked as a correspondent and an editor for various teams. He does not have any crypto holdings.

Sam Kessler

Sam is CoinDesk's deputy managing editor for tech and protocols. His reporting is focused on decentralized technology, infrastructure and governance. Sam holds a computer science degree from Harvard University, where he led the Harvard Political Review. He has a background in the technology industry and owns some ETH and BTC. Sam was part of the team that won a 2023 Gerald Loeb Award for CoinDesk's coverage of Sam Bankman-Fried and the FTX collapse.