Sam Bankman-Fried invests $250M in BlockFi
The move comes as BlockFi looks to expand its business and product offerings. BlockFi has already raised over $350 million in equity financing. The new credit facility will provide BlockFi with additional working capital.
BlockFi offers crypto-backed loans and high-interest savings accounts. The firm currently serves over 250,000 clients across more than 100 countries. BlockFi’s clients have deposited more than $15 billion worth of crypto with the firm.
BlockFi will be able to access even more money. Now that the crypto market has endured a lengthy correction when several businesses have faced liquidity issues.
As a result, BlockFi will utilize the funds to build its balance sheet and strive for long-term stability.
This is not the first time BlockFi has raised funds this year. In February, BlockFi closed a $350 million Series C round. Which was led by Peter Thiel’s Mithril Capital Management and included participation.
From Valar Ventures, Galaxy Digital, Paradigm, Akuna Capital, Fidelity Investments, Purple Arch Ventures, and Morgan Creek. BlockFi has now raised over $625 million to date.
Bankman-Fried is the CEO of FTX, a cryptocurrency derivatives exchange. He is also the founder of Alameda Research, a quantitative trading firm that trades over $1 billion in crypto assets per day.
Bankman-Fried has been an active investor in the crypto space, with previous investments in BlockFi.
According to BlockFi CEO Zac Prince, who confirmed the news via a tweet, “we’re working on something.”
He adds in a statement:
“This agreement also unlocks future collaboration and innovation between BlockFi and FTX as we work to accelerate prosperity worldwide through crypto financial services. This is a significant step forward in our continued commitment to the strength and accessibility of cryptocurrency markets.”
FTX CEO Bankman-Fried comments on the issue in his Tweet.
The BlockFi-FTX deal comes just days after Bankman-Fried announced. That his firm (and Alameda Research) would “step in” to assist distressed crypto projects as the market collapses.
Bankman-Fried has been an active investor in the space. And BlockFi is far from the only company in which he has invested. He is also a shareholder and advisor at Alameda Research, a quantitative trading firm that operates FTX.
It also follows the recent news that BlockFi had been compelled. To liquidate one of its major clients owing to non-fulfillment of margin demands.
Zac, BlockFi’s CEO, says at the time that such an event was “not ideal.” But that the company had been able to protect itself and other clients by using “sophisticated hedging techniques.”
BlockFi has raised a total of $363 million from investors. Including Peter Thiel’s Founders Fund, Galaxy Digital, Valar Ventures, Akuna Capital, Paradigm, Fidelity Investments, Morgan Creek, and SoFi.
In the previous week, Celsius Network, Three Arrows Capital, and Babel Finance all made news for liquidity concerns.
BlockFi’s promise to “never lose money for our clients” is looking increasingly hollow.
On March 2, BlockFi announced that it had raised $52.5 million in a Series C funding round led by Morgan Creek. With participation from new investors such as Andreessen Horowitz and Avalon Ventures.
As well as existing backers such as Peter Thiel’s Founders Fund, Galaxy Digital, Akuna Capital and SoFi.
The fresh capital takes BlockFi’s total fundraising to over $350 million since its inception in August 2017.
BlockFi now joins the ranks of several other companies that have raised large sums of money despite the ongoing bear market.
Crypto exchange FTX, which is less than a year old raised $8 million. In a Series A funding round led by BlockFi’s current lead investor, Morgan Creek.
BlockFi’s CEO, Zac Prince, says that the new funding would be used to expand BlockFi’s product suite and geographical footprint.