Ailing cryptocurrency lender Blockfi has published its accounts for the second quarter of 2022 revealing an astounding $1.8 Billion in outstanding loans it made to institutions and retail investors.
The reports released by the troubled lender showed that in addition to the $1.8 Billion unpaid loans, Blockfi’s net exposure total amount was $600 Million.
As of June 30th, the company had loaned a combined total of $1.5 Billion to institutional borrowers and $300 Million to retail borrowers.
To maintain adequate levels of short-term assets to meet payback obligations and stay solvent enough to keep supporting trading activity and a sufficient inventory balance, Blockfi has introduced some guidelines.
They announced that they will hold a minimum of 10% of the total amount due to their clients in the inventory, ready to be returned upon demand.
The new guidelines stated that they will hold at least 50% of clients’ funds in places that can assure retrieval and reimbursement to their clients upon request in a week. The company will also have at least 90% of clients’ funds upon demand in either their inventory or loans that are redeemable in a year.
2022’s second quarter will go down as one of the worst in the history of cryptocurrency. The collapse of Terra ignited a domino effect that fell harshly on the whole ecosystem that was already reeking from macroeconomic forces.
Liquidity issues became the order of the day among crypto firms, many of which subsequently bowed to the market’s harsh downturn and filed for bankruptcy. Blockfi was however fortunate to receive a cash injection from digital asset exchange FTX.
Blockfi eventually reached an agreement with FTX which gave the latter an option to buy the cryptocurrency asset lending firm for up to $250 Million.
Despite reaching that agreement, Blockfi encouraged their employees to take the option of resigning from the company which came with a bonus of a ten-week paid vacation and ten weeks of health insurance.
This option was unveiled about a month after Blockfi announced that it was laying off about 20% of its total workforce to survive the crypto winter.
Featured image source: news.coincu.com
