The cryptocurrency billionaire founder and CEO of digital-asset exchange FTX Trading is getting the beleaguered industry’s back, doling out lines of credit.
Sam Bankman-Fried, the billionaire founder of FTX Trading, used his verified Twitter account Wednesday Singapore time to announced an injection of 250 million U.S. dollars into BlockFi. On Tuesday, Zac Prince, CEO of BlockFi, used his verified Twitter account to say FTX’s revolving credit facility would provide access to capital to bolster the balance sheet and platform.
«Accelerating Prosperity»
«This agreement also unlocks future collaboration and innovation between BlockFi & FTX as we work to accelerate prosperity worldwide through crypto financial services. This is a significant step forward in our commitment to the strength and accessibility of crypto markets,» Prince said on Twitter.
Bankman-Fried said on Twitter that BlockFi has «successfully removed at-risk counterparties pre-emptively,» and his company would partner with BlockFi to offer products.
Earlier this month, crypto lender BlockFi liquidated at least some of troubled crypto-focused hedge fund Three Arrows’ holdings, which had been used as collateral, according to a «Financial Times» report citing people familiar with the matter. Prince said on his verified Twitter account at the time that it liquidated the collateral of a margin loan to a large client which he did not name. One of Three Arrows’ portfolio companies, Finblox, a crypto-based lending platform, released a statement on Twitter saying it was imposing withdrawal limits so it could evaluate how the Three Arrows news would impact its portfolio.
Taking the Hit
Bankman-Fried has indicated he plans to continue supporting a hard-hit industry.
«We take our duty seriously to protect the digital asset ecosystem and its customers,» Bankman-Fried said on Twitter. In an interview last week with NPR, or U.S.-based National Public Radio, Bankman-Fried cited a «responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion.»
6) We take our duty seriously to protect the digital asset ecosystem and its customers.
Last week, Bankman-Fried’s digital-asset trading firm Alameda Research provided Voyager Digital with a 200 million U.S. dollar loan facility agreement, according to media reports.
Market Selloff
The crypto industry has been hard-hit by a broad-based selloff in digital assets, with layoffs widespread. Crypto.com and BlockFi have all cut hundreds of jobs while rival exchange Coinbase Global announced it would slash 1,100 jobs – or 18 percent of its workforce.
Since peaking in November 2021 at around 2.9 trillion U.S. dollars, the crypto market fallen nearly two-thirds to around 913.6 billion U.S. dollars, according to recent data from CoinMarketCap. In addition to a challenging macro environment, digital currencies have been hit by various market troubles including the collapse of stablecoin TerraUSD and the recent halt of withdrawals at crypto lender Celsius Network.
