BlockFi has $1.8B in outstanding loans, $600M of which are uncollateralized
Liquidity issues in the crypto market have forced some of the largest companies in this area to post transparency reports to address the ongoing crisis.BlockFi, a centralized crypto lender, published its own quarterly Transparency report After receiving the long-awaited funding injection from FTX.US.
Lenders received a $ 400 million revolving credit line from a US exchange last month, but haven’t used it yet.
In a quarterly report issued on July 22, BlockFi revealed how to manage the assets held on the platform and all associated liquidity and credit risk.
According to the report, BlockFi currently has a loan balance of $ 1.8 billion to borrowers. Currently, about $ 600 million worth of loans are unsecured because the platform does not require all borrowers to pledge collateral.
A total of $ 1.5 billion has been issued to institutions such as hedge funds, market makers, proprietary trading companies, exchanges and miners. Since all institutional investors go through a credit due diligence process, BlockFi allows a certain number of customers to access their loans without collateral.
“Whether or not we require institutional investors to pledge collateral, and if so, the type and level of collateral required depends on the borrower’s credit profile and the size and composition of the loan portfolio,” the company said.
The remaining $ 300 million of unpaid loans consist of retail loans, all of which are oversecured. BlockFi said it only allows retail customers to borrow funds at a value of up to 50% of the collateral, which is subject to liquidation.
The company announced that it has established a set of guidelines that enable it to manage liquidity risk and meet its obligations to institutional investors and personal borrowers. That is, BlockFi holds at least 10% of the total amount because the client is ready to be returned immediately upon request. At least 50% of the amount payable to the customer is held in inventory or a loan that can be called within 7 calendar days. And finally, at least 90% of the total amount payable to the customer is held in inventory or a loan that can be called back within a year.
BlockFi currently holds approximately $ 3.9 billion in various digital assets, including stablecoin. Approximately $ 2.6 billion was transferred to the company through various borrowing agreements, of which $ 1.3 billion consisted of collateral provided by borrowing clients.
More than one-third of the company’s $ 3.9 billion is easily accessible and held by third-party custodian and multi-party computing wallets and accounts. However, the company said some of these accounts may contain assets deployed for hedging activities. BlockFi said about 4% of these assets were deployed “as an investment” or “for unmanaged staking,” but did not provide details on where the funds were invested.
