Cryptocurrency lender company BlockFi has signed a nonbinding agreement with leading American crypto exchange FTX to secure a $250 million revolving credit facility to improve its balance sheet and strengthen its foothold.
A revolving credit facility is a type of loan that allows the borrower to draw down or withdraw, repay, and withdraw again.
BlockFi Closes $250 Million Deal With FTX
Announcing the development on Tuesday, BlockFi’s CEO Zac Prince noted that “the proceeds of the credit facility are intended to be contractually subordinated to all client balances across all account types (BIA, BPY & loan collateral) and will be used as needed.”
— Zac Prince (@BlockFiZac) June 21, 2022
Prince also noted that the partnership with the Sam Bankman-Fried crypto derivatives exchange would unlock the door for future endorsements between the two companies as they work to accelerate financial freedom across the globe through crypto services.
The development comes at a time when global financial markets are experiencing a severe downturn that has led to the fall of top cryptocurrencies, including stablecoins depegging from reserve-backed assets. Both BTC and ETH plummeted to new lows and traded below $20,000 and $1,000, respectively, pushing the total crypto market cap below $1 trillion.
BlockFi Reduces Workforce by 20%
Last week, BlockFi followed in the footsteps of other crypto companies to reduce its workforce by 20% due to the falling crypto market.
“This morning, we announced that after taking significant time to plan and consider, we are reducing our headcount by roughly 20%. This is not a decision we take lightly and brings us great sadness,” Prince said.
The CEO also noted that he is proud of how his risk management officers have been able to stay afloat with market volatility in the past few weeks after addressing speculation about the company’s risk management policies.
As reported previously, Coinbase and CryptoCom have already slashed their team size by 18% and 5% respectively for similar reasons.