Argo Blockchain Secures Second BTC-Backed Loan From Galaxy Digital
- The fresh $25 million BTC-backed loan will help Argo meet its cash flow requirements, and fund the expansion of its West Texas mining facility.
- The new agreement will see Argo Blockchain roll up both its loans into one, for a combined sum of $45 million, with a maturity date of 29 October.
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Argo Blockchain has once again secured a loan agreement from Galaxy Digital using its Bitcoin holdings as collateral, the London Stock Exchange posted on 10 September.
According to the agreement, Galaxy Digital has agreed to provide an £18 million loan (around $25 million) to crypto mining company Argo Blockchain, which will use its BTC holdings as collateral. This is the second BTC-backed loan the company was able to receive from Galaxy Digital this year, with it having secured a £14 million ($20 million) loan back in June. The company said on Twitter:
“The loan will enable Argo to retain its current Bitcoin holding, whilst further expanding its mining operations. Argo is delighted to continue working with Galaxy as its financing partner.”
Under the terms of the deal, Argo’s existing loan will be rolled into the new agreement, for a combined total of $45 million. The company will reportedly use the newly acquired funds to meet its existing cash flow requirements, as well as support the expansion of its mining operation in West Texas. Back in March, Argo purchased 320 acres of land in West Texas with the intention of creating a 200-megawatt BTC mining facility.
By securing a BTC-backed loan, the company is able to increase its available capital without liquidating the coins it is currently holding. The new agreement has set the maturity date for the loan to 29 October, meaning the company is bullish on the price of the largest cryptocurrency by market cap. If its bet pays off, and the price of BTC increases in the next two months, Argo will be able to repay both its loans with fewer coins, earning it a significant yield from its BTC holdings.
- The bankrupt crypto lender has agreed on a settlement with its Series B holders on how to distribute the $25 million from the sale of self-custody platform GK8.
- The majority of funds, $24 million, will be allocated for legal expenses, while the remaining $1 million will be distributed between the Series B holders.
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- The new funding will help Chaos Labs build out and expand its suit of risk and security products that can help DeFi protocols.
- The seed funding round was co-led by PayPal and Galaxy Digital, but also saw participation from including Coinbase Ventures, Polygon, Avalanche, OpenSea, Uniswap, and others.
- Partnering with Chainlink will allow Galaxy Digital to distribute its crypto pricing data to various blockchains, and help developers build better applications.
- The company noted that its high-quality pricing data will play a valuable role in “unlocking exciting new use cases and driving innovation across the DeFi ecosystem.