FTX recently provided BlockFi with a $250 million bailout. According to an unnamed source, Sam Bankman-Fried’s cryptocurrency exchange is in talks to buy back shares of BlockFi.
FTX is considering holding shares of BlockFi company after the agreement for this lending platform facing liquidity problems to borrow $250 million on the evening of June 21. At the time of the bailout, many people were still confused about this decision by the owner of the cryptocurrency exchange led by Sam Bankman-Fried.
“This agreement opens the door to future collaboration and innovation between BlockFi and FTX as we jointly drive prosperity around the world through crypto financial services.”
BlockFi CEO Zac Prince expressed.
“Official documents” outlining BlockFi’s credit line terms from FTX are still in progress and could include the exchange’s acquisition of shares in the stolen crypto lender beat. Unnamed sources familiar with discussions between BlockFi and FTX told the Wall Street Journal on Friday that an equity deal has yet to be reached.
Prince explained on Tuesday that the revolving line of credit would be client-funded, meaning the company will meet its obligations to customers before repaying FTX.
Prince told Bloomberg that using the line of credit is strategically and offensively equivalent and that the company handled “higher-than-usual withdrawal volumes” last week. When the Celsius news broke abruptly suspended, all user withdrawals from its platform almost two weeks ago and has been silent since.
“We felt that it was a smart, offensive and strategic decision for BlockFi to strengthen the balance sheet and inform people about it,”
BlockFi CEO said.
Meanwhile, FTX CEO Bankman-Fried has been silent about the BlockFi deal. But 23/6, he complained about the reluctance of venture capitalists to provide more fulcrum for crypto startups during a market downturn.
Bankman-Fried also shared before “rescue” BlockFi, that he feels his companies “have a responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion.”
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