June 21 (Reuters) – BlockFi has signed a term sheet with
digital asset exchange FTX for a $250 million revolving credit
facility, the cryptocurrency firm’s chief executive officer, Zac
Prince, said in a tweet https://twitter.com/BlockFiZac/status/1539216594383028224
The agreement will give BlockFi access to capital amid a
rout in the digital currency market. Last week, the company said
it was reducing its headcount by about 20%, in addition to
implementing other cost-cutting measures like reducing marketing
spending and executive compensation.
FTX Founder and CEO Sam Bankman-Fried said in a tweet https://twitter.com/sbf_ftx/status/1539268631095152642?s=21&t=6IKWqlgii1rM5BTAmAFCEg
that the credit facility will enable BlockFi to “navigate the
market from a position of strength.”
Aggressive rate hikes by the U.S. Federal Reserve and
recession fears have led to a turmoil in equities and sparked a
sell-off in crytocurrencies. Over the weekend, the world’s
biggest cryptocurrency, bitcoin, dropped below the key $20,000
level for the first time since December 2020.
The crypto winter has also hurt other major players like
Coinbase Global Inc, which last week said it would cut
about 18% of its workforce.
Companies use revolving credit facilities as backstop
financing to combat adverse impacts on other sources of income.
For the most part, these facilities remain undrawn.
(Reporting by Niket Nishant in Bengaluru and Hannah Lang in
Washington; Editing by Maju Samuel)