- BlockFi released its transparency report for Q2 2022.
- The platform had $1.8 billion in outstanding loans in Q2.
- The company is taking a number of measures to manage liquidity risks.
BlockFi has released its transparency report for Q2 2022, and it gives a good picture of how the market crash has affected the platform. The report relates to the platform assets and management of liquidity and credit risks and was published on July 21.
We’ve just published our Q2 Transparency Report with a breakdown of our total AUM, retail and institutional loans, and how we manage related liquidity and credit risk.
The crypto lending platform publishes the transparency report to give a picture of how the company is performing in a clear way — something which many crypto companies have been doing. One of the highlights of the report is the fact that BlockFi has $1.8 billion in outstanding loans at the end of Q2, 2022. Net exposure amounts to $600 million.
Regarding the management of liquidity risks, BlockFi is taking a few steps to ensure safety. It will hold at least 10% of total amounts due to clients upon demand in inventory, ready to be returned to clients, at least 50% of total amounts to be called within a week, and at least 90% of total amounts to be called within a year.
BlockFi has been in the news for several reasons in recent weeks. FTX recently made a deal to buy the company, at a highly discounted price. BlockFi had also been given a $250 million line of credit by FTX in June 2022.
The company has certainly been going through a tough time, but it is not the only one. Recent market events have upended the way many crypto companies work, and the future doesn’t look as rosy as it once did for many.
Companies Being Careful Following Recent Market Events
BlockFi was one of many companies affected by the recent market crash and the insolvency of Three Arrows Capital (3AC). The firm had given 3AC assets, and as a creditor, it is seeking to recover some of the funds. Voyager Digital was another firm that had lent 3AC funds and has also gone insolvent.
The sudden downfall of once major crypto firms has shaken the market and its participants. Many of these were stalwarts who could do no wrong — or at least investors thought. The turn of events has led to many rethinking how to function in the crypto space.
With the liquidation of companies and increased regulatory scrutiny, the emphasis on safety measures and a more cautious approach to running businesses will be paramount. In the short term, this may bring some pain, but in the long term, it may prove beneficial.
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