Is FTX saving the crypto industry or taking control of it? The derivatives-focused cryptocurrency exchange has been on the sidelines, watching everything around them collapse, and finally decided to take action. That or, as the rumor mill says, FTX created this whole situation in their labs. And is now buying assets on the cheap. There’s only circumstantial evidence of that, though. The bailout, on the other hand, is completely real.
The proceeds of the credit facility are intended to be contractually subordinate to all client balances across all account types (BIA, BPY & loan collateral) and will be used as needed.
— Zac Prince (@BlockFiZac) June 21, 2022
Earlier, BlockFi CEO Zac Prince tweeted, “today BlockFi signed a term sheet with FTX to secure a $250M revolving credit facility providing us with access to capital that further bolsters our balance sheet and platform strength.” For his part, FTX CEO Sam Bankman-Fried replied “today we’re injecting $250m into BlockFi and partnering with them so they can navigate the market from a position of strength.”
Sources tell me that it is common knowledge within the #Crypto industry right now that Alameda (FTX) & SBF are 100% trying to push the #Bitcoin price down right now to liquidate a number of market participants including, but not limited to #Celsius.
— N (@NickNew41532832) June 21, 2022
Over the last few weeks, the crypto market has been trending down. The contagion effect of the Terra/ Luna extinction event rocked every company out there, most of all those who offered yield on cryptocurrency deposits like BlockFi and Celsius and hedge funds like Three Arrows Capital. These companies’ problems and possible liquidation of assets, in turn, sent the crypto market into even more turmoil.
Related Reading | Crypto Exchange FTX US Sees Growth: Trading Volume Surged 512% In Q3
What Is FTX ‘s Endgame?
We wouldn’t know, but the exchange put itself in a position of power with all of these movements. According to Bankman-Fried, BlockFi “successfully removed at-risk counterparties preemptively,” and the company acted decisively by “removing troublesome counterparties before they become a problem, and adding cash before it was necessary.” And yes, by “troublesome counterparties” he means Celsius and 3AC.
3) Sometimes leadership means acting decisively and that’s what BlockFi did: removing troublesome counterparties _before_ they become a…
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