Breaking: BlockFi CEO Describes Latest Move “Best Possible Outcome”

After undergoing an agreement with Sam Bankman-Fried’s FTX to resolve liquidity woes, BlockFi says the recent move was needed anyway. Last month, FTX US offered the company a revolving credit facility of $400 million. The BlockFi FTX agreement also included an option to to acquire BlockFi for $240 million.

BlockFi’s Plans After Securing Help

Speaking to CNBC, BlockFi chief executive officer Zac Prince said his company was anyways looking to raise capital to suffice business needs. He said the revolving credit facility is important for supporting BlockFi’s requirements but the overall goal was to boost the balance sheet. Prince added that there are two things to the BlockFi FTX agreement. The first is the $400 million credit facility and the other is an option to acquire.

“The goal of this deal from BlockFi’s perspective was to bolster our balance sheet. The second aspect is an option (for FTX) to acquire BlockFi for up $240 million. This can be exercised at the earliest in the fall of 2023.”

The CEO said the deal could help his company navigate the existing market conditions from a position of strength. “Over the long term, we see really interesting synergies between the two firms. I am really impressed with what Sam and the FTX team has done throughout this time supporting the industry, he added.

Would BlockFi Be Filing For Bankruptcy If Not For FTX Help?

When asked if BlockFi would have been filing for bankruptcy if not for the FTX assistance, the CEO said the capital raise was needed anyway. He indicated that the deal helps optimize for the capital market transactions to achieve the best outcome. The outcome should be in the best interests of all stakeholders, the clients, the team and shareholders, Prince explained.

“It was clear that we wanted to bring in additional capital when we looked at the next six months. Hence, we went out to the market and we got the best we could. And now the company is in a stronger position.”

Earlier in the day, the crypto lender announced it would no longer accept Grayscale’s GBTC shares as collateral.