Centralized crypto lender BlockFi outlined the total amount of loans and net risk exposure it carried at the end of Q2 2022 and disclosed that it had $1.8 billion in outstanding loans from institutional and retail investors and $600 million in “net exposure.”
Of the outstanding loans to borrowers, the firm reported that $600 million are uncollateralized loans. Institutional loans reported for $1.5 billion of the total outstanding loans, while retail loans made up the remaining $300 million. The firm based its holdings and outstanding loan amounts on a Bitcoin (BTC) price of $19,986 as a reference point.
BlockFi has established guidelines to help it “maintain the liquidity necessary to meet all our obligations under our core business activities, which includes institutional and retail borrowing and trading activities.”
Those guidelines specify that it will hold at least 10% of the total amount due to clients and will be ready to be returned to clients.
It will also hold at least 50% of payable funds in places that can be retrieved and returned to clients within one week and will hold at least 90% of the total amounts owed to clients upon demand either in inventory or in loans that can be called back within one year.
The new liquidity guidelines come a few weeks after the collaboration of BlockFi and crypto exchange FTX.US. They signed an agreement to send $400 million to BlockFi as a “credit facility” with the option to acquire the firm for up to $240 million based on performance triggers.
BlockFi, in a July 20 post, explained that it only provides uncollateralized loans to borrowers it considers “Tier 1” clients. Tier 1 clients are institutional clients who have “a significant capital base, financial statements audited by reputable third parties, and a willingness to be transparent and engaged with” BlockFi.
The clients it considers to be “Tier 2 and Tier 3” clients are not sujected to make uncollateralized loans.
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