Controversial crypto exchange BlockFi has been thrown a lifeline in the shape of a US$250mln revolving credit facility from FTX, a fellow crypto exchange.
Zac Prince, BlockFi’s chief executive, said in a tweet: “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.”
Bitcoin’s recent slump has put pressure on firms across the cryptoverse with retrenchment, job cuts and restricted trading the new norm.
Sector leader Coinbase has cut 18% of its staff. Binance, the world’s largest crypto exchange, at one point halted bitcoin trading while Celsius, another big exchange, has frozen withdrawals.
BlockFi shot to prominence earlier in the year when it was fined US$100mln by the SEC for its high-yield accounts, which the US regulator said were securities.
Zac Prince said that the new line of credit would be used to safeguard users’ funds across all accounts type.
Sam Bankman-Fried, FTX's chief executive, blamed the Federal Reserve and its 'aggressive' interest rate hikes for the crypto sector's problems.
"The core driver has been the Fed," he said in an interview at the weekend.