At a time when no central bank seems willing to assist cryptocurrency companies caught in the maelstrom of the recent sell-off in the industry, some of them are seeking a “helping hand” from their rivals.
And billionaire Sam Bankman-Fried, head of cryptocurrency exchange FTX and one of the richest people in the industry, is responding by offering a “lifeline” to two companies in just two weeks. They are banking platform BlockFi and digital asset brokerage Voyager Digital.
Bankman-Fried’s FTX disclosed on Tuesday that it has agreed to provide BlockFi with a $250 million revolving line of credit, which the billionaire said will help BlockFi “move from a position of strength.”
“We take seriously our duty to protect the digital asset ecosystem and its customers,” the billionaire head of FTX tweeted.
The news follows BlockFi’s announcement earlier in June that it would lay off 20% of its staff.
BlockFi was not immediately available to comment on the matter when contacted by CNBC.
Meanwhile, last week, Voyager Digital disclosed that Alameda Research, the Bankman-Fried data analytics firm, would provide it with $500 million in funding.
The deal provides for a $200 million line of credit in cash and stablecoins, as well as from a separate revolving 15,000 bitcoin credit facility, worth approximately $300 million at current prices.
The “plunge” in digital currencies in recent weeks has resulted in many companies in the cryptocurrency industry currently facing financial problems.
Bankman-Fried is one of the richest people in the cryptocurrency industry, with an estimated net worth of $20.5 billion, according to Forbes. And the cryptocurrency exchange he founded, FTX, was valued at $32 billion in early 2022.
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