Sam Bankman-Fried’s FTX crypto alternate has signed a cope with an choice to purchase embattled crypto lender BlockFi for as much as $240 million, BlockFi Chief Govt Zac Prince mentioned on Friday.
FTX has additionally agreed to supply BlockFi with a $400 million revolving credit score facility, Prince mentioned in a tweet. He added that BlockFi has confronted a soar in withdrawals after information of crypto lending platform Celsius Network’s freeze.
Fears of a doable US recession attributable to aggressive rate hikes from the Federal Reserve have roiled dangerous belongings this yr, together with cryptocurrencies. That has sparked a meltdown in what was simply final yr a booming industry.
Final month, BlockFi reduce 20% of its headcount and carried out a number of cost-cutting measures akin to decreasing advertising spending and government compensation.
Firms use revolving credit score services as backstop financing to fight opposed impacts on different sources of earnings. For probably the most half, these services stay undrawn.
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