FTX Trading has recently offered a line of credit to BlockFi. The exchange will lend US$250 million to the crypto asset lending platform.
The money will be used for BlockFi to provide liquidity for the platform’s operations. The credit line was announced on Twitter by BlockFi CEO Zac Prince.
He said the amount raised will be used according to the company’s needs. In addition, the line of credit made available by FTX Trading will further strengthen the balance sheet of the crypto lending platform.
“Today BlockFi signed a term of commitment with FTX to secure a US$250 million revolving line of credit, providing us with access to capital that further strengthens our balance sheet and the platform’s soundness”.
Crypto lending companies suffer as the market plunges
The crypto market faced a significant devaluation in the week, directly affecting crypto lending platforms. With companies like Celsius and Three Arrows experiencing liquidity problems, BlockFi had to liquidate the participation of large investors who failed to meet margin calls on crypto lending transactions.
In addition to BlockFi, FTX Trading has liquidated leveraged positions of platforms like Celsius. Thus, to secure liquidity for BlockFi, the exchange announced a US$250 million credit line to the platform.
BlockFi laid off 20% of the company’s employees, equivalent to 170 employees. The US$250 million credit line offered by FTX Trading is in the process of finalizing the agreement, where the parties are expected to sign some documents in the coming days that should secure the loan.