Decentralized crypto lending firm BlockFi has revealed that it held loan exposures totaling $1.8 billion from retail and institutional investors by the end of June. Along with that, it had $600 million in “net exposure.”
BlockFi published the disclosure in its Q2 2022 Transparency Report on Friday. The Transparent Report outlines quarterly updates of digital assets exposure on the platform and highlights the firm’s risk and credit management strategies.
According to the report, “net exposure” is defined as “the fair value of loans to the counterparty minus the fair value of collateral posted by the counterparty.” Meaning out of the $1.8 billion outstanding loans, $600 million isn’t backed by any security or collateral.
In a separate blog post, BlockFi mentioned that it provides uncollateralized loans to only “Tier 1” clients with a significant capital base.
BlockFi also had some exposure to the now bankrupt hedge fund 3AC. However, the company has written off those loans.
A significant portion of the $1.8 billion loan is from institutions, accounting for $1.5 billion, and the remaining $300 million is made up by retail investors.
BlockFi’s new liquidity risk guidelines state its objective to maintain liquidity at all levels to meet customer obligations under the core business.
Moving forward, the digital lender plans to hold at least:
“10% of total amounts due to clients upon demand in inventory,”
“50% of total amounts due to clients upon demand either in inventory or in loans that can be called within seven calendar days,”
and
“90% of total amounts due to clients upon demand either in inventory or in loans that can be called back within one year.”
The guidelines come after BlockFi accepted a credit line of $250 million in June. Company CEO Zac Prince remains optimistic about the future of the company amid the bear market.
