Is FTX saving or taking over the crypto market? The cryptocurrency exchange that focuses on derivatives has been watching the world fall and then decided to move in. Or, according to rumor, FTX caused this entire situation in their laboratories. Now, he is buying assets at a bargain price. There’s only circumstantial evidence of that, though. On the contrary, bailouts are completely true.
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.”
According to sources, it’s common knowledge in the #Crypto industry right now that Alameda (FTX) & SBF are 100% trying to push the #BitcoinPrice down now in order to liquidate many market participants, including but not limited. #Celsius.
— N (@NickNew41532832) June 21, 2022
In the last week, crypto markets have been declining. Every company affected by the Terra/ Luna extinction incident, especially those that offered cryptocurrency deposit yields like BlockFi or Celsius, and hedge funds such as Three Arrows Capital, was rocked. These companies’ problems and possible liquidation of assets, in turn, sent the crypto market into even more turmoil.
Read Related Article: Crypto Exchange US Sees Growth: The Trading Volume Increased 512% in Q3| 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 problem, and adding cash _before_ it was necessary.
— SBF (@SBF_FTX) June 21, 2022
Zac Prince, for his part, sees it as an all-around victory. “Throughout the market volatility of the last several weeks, I’m incredibly proud of how our team, platform and risk management protocols have performed. Today’s landmark announcement reinforces BlockFi’s commitment to serving its clients and ensuring their funds are safeguarded.” However, are $250M enough for a company this size? Let’s hope it is, for the sake of its clients.
The companies appear eager to work together in any event. Prince said, “this agreement also unlocks future collaboration and innovation between BlockFi & FTX as we work to accelerate prosperity worldwide through crypto financial services.” On the same subject, Bankman-Fried claims FTX is “excited to partner with BlockFi to offer industry leading products.”
So, everything’s peachy on the crypto front at the moment, right? What happens, however? Is FTX allowed to purchase the entire company at peanuts?
SOL price chart for FTX | Source: SOL/USD on TradingView.com
BlockFi ‘s Previous Problems
This article will discuss the subject. Zerohedge reminds us of a recent episode in BlockFi’s history:
“As a reminder, BlockFi was fined $100 million in February this year for its high-yield interest accounts, which were deemed as security products by the United States Securities and Exchange Commission.”
They are so precious, it is hard to forget. BTC to be used in place of stablecoinsSome lucky users will be able to use it?
“One Reddit-user shared a screengrab of their bonus payment showing that they received 701.4 Bitcoin, which equates to more than $24 million US dollars at the time of writing. They said they believe they were owed around $700 USD and that the Bitcoin transaction had been reversed.”
BlockFi Co-Founder Sees Huge Growth And FOMO For Crypto In 2022| BlockFi Co-Founder Sees Huge Growth And FOMO For Crypto In 2022
This is how it works Zac Prince responded, “Our team is battle tested and has weathered many storms over the years, which only makes us stronger and more resilient as we navigate today’s market environment.” That’s a way of putting it. What can he do about the report that the company suffered losses of more than $285M in the bull market.
@BlockFiThe income statement is a real disaster
It’s a mess of negative numbers, let’s dig into it togetherhttps://t.co/Kr9lhiH8AS
— otteroooo (@otteroooo) June 19, 2022
If the rumors are true, does that guarantee that their business model failed and they won’t be able to survive the bear market? No, it doesn’t. However, it suggests so.
Charts by TradingView| Charts by TradingView
