Cryptocurrency lender BlockFi has stopped accepting Grayscale Bitcoin Trust (OTC:GBTC) as collateral and trimmed its investment fund positions amid contagion following the collapse of hedge fund Three Arrows Capital, Bloomberg reported Tuesday, citing a person with knowledge of the matter.
Grayscale, the manager of (OTC:GBTC), and BlockFi were exposed to bankrupt Three Arrows. BlockFi has already incurred $80 million in losses due to 3AC’s bad debt, Bloomberg noted, adding that 3AC owned 5% of GBTC at one point.
BlockFi CEO Zac Prince wrote on Twitter Publish Monday that his company “doesn’t own any GBTC directly” and “we have small loans (like $10 million) with GBTC as collateral that are winding down.”
Recall back in late June when Sam Bankman-Fried’s FTX US struck a deal with BlockFi that will give FTX the option to acquire the beleaguered crypto lender for a variable price of up to $240 million.
Note that BlockFi was able to maintain operations and not freeze customer withdrawals unlike its late crypto counterparts Celsius, Voyager Digital (OTCPK:VYGVF) and Babel Finance.
Grayscale Bitcoin Trust (OTC:GBTC) NAV decline continues to rise amid the cyclical fall in bitcoin (BTC-USD). It recently stood at a whopping -31.9%, according to data from Y-Charts.
In mid-June, BlockFi planned to lay off some workers as the market downturn intensified.