Bloomberg News reports BlockFi decided to unwind its position in Grayscale Bitcoin Trust. It is no longer accepting GBTC shares as collateral. This was revealed by an individual who is familiar with the matter. The crypto lender has decided to use the shares of the investment fund is concerned. It will evaluate the use of shares of Grayscale Bitcoin Trust.
More on the Matter
This move of the crypto lender implies how liquidation after the collapse of the crypto hedge fund Three Arrows Capital is sending shock waves across the crypto industry.
BlockFi is not holding any positions in the GBTC and plans to wind down a few loans where GBTC makes up part of the collateral, the lender of Jersey City revealed in a statement that followed a story published earlier by Bloomberg.
The company stated that it is not saying that it will not support the GBTC that can be used as collateral moving forward. Like any other collateral, the company said that it constantly is evaluating the appropriate haircut ratios of collateral and is aiming at accepting as many different types as possible of collateral for clients to hold.
Grayscale was not available for comments.
Bloomberg News also reports that Grayscale was exposed to the same when Three Arrows collapsed. It was exposed to the same when Three Arrows collapsed. BlockFi was suffering losses of about $80 million from its bad debt. According to the Chief Executive Officer of BlockFi, Zac Prince, the company absorbed this bad debt.
Towards the end of June, BlockFi agreed with FTX US to allow a revolving credit facility of $400 million to the crypto lender. This would let the FTX US for acquiring BlockFi for as much as $240 million.
Unlike Babel Finance, Voyager Digital, and Celsius, which are crypto lenders, BlockFi has continued maintaining its operations and did not require suspending the withdrawals.
