Since the crash of Terra (LUNC) in May 2022, crypto lenders have been trying to deal with losses and manage liquidity issues.
Yesterday, July 12, BlockFi, a crypto lender, claimed that GBTC shares of Grayscale would no longer be accepted as shares.
The news had its repercussions, as GBTC stock (OTCMKTS:GBTC) fell 5% yesterday, closing the day at $12.21. While bitcoin and other major cryptocurrencies are doing their best to get into the recovery phase, so does GBTC. The price of Grayscale Bitcoin Trust (GBTC) is down around 65% so far.
As BlockcFi revealed the news, it pointed to the ill-effects of bankrupt companies as well as vulnerabilities of crypto lending platforms. This is because Grayscale was hit by the bankruptcy of Three Arrows Capital as it held more than 5% of GBTC’s stock.
On the other hand, BlockFi has lost $80 million due to the debt of Three Arrows. Not only that, BlockFi CEO Zac Prince also confirmed that the company will also be part of 3AC’s ongoing bankruptcy case.
BlockFi will soon shut down all GBTC
Yesterday, July 12, the company’s CEO Zac Price, responding to Coinsahres’ Chief Strategy Officer, tweeted Meltem Demirors’ comments regarding the state of GBTC that BlockFi has no GBTC and some loans with GBTC that are collateralized. are placed in the form will soon be curved.
On the other hand, BlockFi also signed a deal with FTX US to find a solution to its increasing liquidity. The agreement states that FTX will offer $400 million of credit in exchange for acquiring BlockFi for US$240 million. However, no further updates are available yet.