FTX exchange helps BlockFi with $250 million credit in crypto storm

Major cryptocurrency exchange FTX has invested a whopping $250 million in BlockFi. The capital injection is the result of a more direct collaboration between the two parties and is a direct result of the enormous volatility in the crypto markets. It prevents BlockFi from falling over due to the problems that the situation has caused in the market.

FTX exchange lifesaver for BlockFi

The falling bitcoin (BTC) price is causing many problems within the crypto industry. Crypto companies that may not have been fully prepared for a downturn like this are now in trouble. For example, because they can no longer repay their debts to other parties. In the long run, this can set off a further chain reaction with crypto company after company falling over.

BlockFi was in a similar situation as a result of the problems at Three Arrows Capital. BlockFi is a crypto exchange where traders can also borrow crypto, for example, to make trades. One such party that did this was Three Arrows Capital, a hedge fund.

Earlier in the crypto news it could be read that this fund is in deep trouble. It would even be so bad that the fund is on the verge of collapse. In that case, it would no longer be able to pay off its debts and parties such as BlockFi would therefore run into problems. That’s why FTX is offering a rescue by offering $250 million in revolving credit.

BlockFi can weather storm with help from FTX

With the loan, FTX CEO Sam Bankman-Fried says it can help BlockFi navigate the storm that is now raging. He said this on Twitter this week:

“Leadership sometimes means acting decisively and that’s what BlockFi did: remove difficult counterparties before they become a problem, and add cash before it is needed.”

Of course, on the other hand, the two parties will now work more closely together. It solidifies FTX’s position within the crypto ecosystem and the partnership with BlockFi fits within the expanded pallet of trading opportunities that FTX offers.

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The exchange has been growing rapidly lately and is now one of the greats on the planet. Recently, it launched another regulated trading platform in highly regulated Japan.

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