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BlockFi secures $250 million credit line from FTX, CEO emphasizes it's just a precautionary measure

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BlockFi secures $250 million credit line from FTX, CEO emphasizes it

The fallout between Celsius and Three Arrows Capital has affected many other institutions. Previously, the Financial Times reported that BlockFi liquidated collateral from Three Arrows Capital. In order to further strengthen its balance sheet, BlockFi announced yesterday that it has secured a $250 million credit line from FTX.

SBF Previously Stated: Responsible for Preventing Crisis Spread

Facing the consecutive collapses of two major institutions, severely impacting investor confidence, SBF had previously mentioned in an interview with the U.S. public radio station NPR that he did consider intervening to prevent the crisis from spreading, which would be healthier for the crypto ecosystem.(source).

He stated:

"I did seriously consider intervening in this crisis because we have a responsibility to do so. Even if intervening means we lose some money, we need to prevent the crisis from spreading."

Although we did not cause the crisis nor were we involved, preventing the crisis from spreading is beneficial for the crypto ecosystem. I want to do things that can help the growth of the crypto ecosystem."

However, he also emphasized that BlockFi's debt repayment ability is not an issue, the need for credit is merely precautionary, demonstrating that BlockFi has a cautious risk management approach.

SBF tweeted:

"BlockFi has a cautious risk management approach and excellent situational leadership, which is why they are able to identify counterparty risks in advance and liquidate positions. User assets in BlockFi are well managed, without debt risks from entities like Three Arrows and Celsius."

It is worth noting that this is not FTX's first time extending a helping hand to peers.

In the incident where the Japanese cryptocurrency exchange Liquid was hacked last year, resulting in the theft of nearly $100 million worth of cryptocurrencies, FTX provided Liquid with a $120 million financing.