The crypto world was rocked by the collapse of FTX, and the ripples continue to spread. One significant detail emerging from the FTX bankruptcy proceedings is the revelation that FTX loaned BlockFi $250 million in FTT, the exchange's native token. This loan has become a central point in understanding the financial entanglement between the two companies and BlockFi's subsequent struggles.
L’affaire FTX aurait plongé BlockFi dans la tourmente. The plummeting value of FTT tokens, described as Des FTT qui ne valent quasiment plus rien, significantly impacted BlockFi's financial stability. In the declaration of John Ray, we découvrons que West Realm Bankrupt Crypto Exchange FTX has revealed in its first-day Declaration a loan of about $250 million FTT awarded to BlockFi, a popular US crypto lending platform.
This revelation sheds light on the extent of FTX's financial support for BlockFi and the potential vulnerabilities this created. Prior to FTX's downfall, Crypto lender BlockFi has announced that it had received a $250 million (roughly Rs. 1,955 crore) revolving line of credit from crypto exchange FTX to help bolster its liquidity. CEO Zac Prince announced in a Tuesday Twitter thread that BlockFi had secured a $250 million credit facility from crypto exchange FTX. The deal, which Prince said would provide crucial capital.
However, with FTX now bankrupt, the value of the FTT tokens backing the loan is severely diminished, leaving BlockFi in a precarious position. The $250 million in revolving credit from FTX is expected to keep the lender afloat as it works to improve its solvency issues. FTX CEO Sam Bankman-Fried later tweeted about supporting BlockFi and the broader crypto ecosystem, but these efforts ultimately proved insufficient to prevent the cascading effects of FTX's collapse.
The future of BlockFi remains uncertain as it navigates the complexities of the FTX bankruptcy and seeks to recover from the losses incurred due to the FTT loan. The situation highlights the interconnectedness of the crypto industry and the risks associated with relying on centralized exchanges and their native tokens.