(Bloomberg) -- Within the cryptocurrencies space, lenders have been under the spotlight in recent days after some disclosed signs of trouble. But one of the biggest players in the space, BlockFi Inc., says every aspect of the business is functioning.

The Jersey City, New Jersey-based company made waves on Tuesday when it disclosed that crypto powerhouse FTX agreed to provide it with a $250 million revolving credit facility. Zac Prince, co-founder and CEO of BlockFi, said the move helps to further bolster his company’s balance sheet. 

Read more: Crypto Lender BlockFi Gets $250 Million Credit Line From FTX

Bloomberg News spoke with Prince about the agreement. Though he declined to share details on the revolver, Prince said the credit facility is subordinate in priority to client funds, meaning if the company ever encountered a liquidation scenario, clients would get their funds back before any of the credit line was paid back.    

What follows is an interview with Prince, which took place on Tuesday. Some of the questions and answers have been edited for length and clarity:

Q: What can you tell me about the revolver?

A: At a high level, the best time to raise capital is when you don’t need it. Obviously markets in general are pretty volatile right now. Crypto markets, in particular, are pretty volatile right now given some of the events that have taken place over the past six weeks. While markets are volatile, this was a strategic decision on our part to further bolster our balance sheet and reinforce our commitment to serving clients and ensuring all funds are safeguarded.

Q: How come you made this move with FTX right now?

A: It was equal parts an offensive and defensive move. To the untrained eye, BlockFi might look to have a seemingly similar business model to others in the space. To the trained eye, and what we know -- everybody at BlockFi, what Sam [Bankman-Fried] and the FTX team know, what a lot of people in the industry know -- is that it’s night and day. We felt that it was a smart, offensive and strategic decision for BlockFi to bolster the balance sheet with a big number, and tell everybody about it.

Q: How is your relationship with your banks right now?

A: Before UST/Luna happened, we had two Bitcoin-backed credit lines open with two different banks. Before UST/Luna, we had borrowed a partial amount of those facilities. Fast-forward to today, we still have those Bitcoin-backed credit facilities with the banks, but the drawn amount right now is zero. We have great relationships with them, with all of our banking partners. Everything is working as it always has.

Q: And how is BlockFi doing?

A: In May 2022, BlockFi was cash-flow positive and had the best month ever in the company’s history. Like the broader crypto industry, and as a result of some of the recent events in the market, we’re absolutely seeing the negative implication on our platform in the very short term. We see this all the time when there’s negative news events -- people get scared, they withdraw and they ultimately come back once the trust is restored or the dust is settled, depending on the event. So we definitely saw an uptick in that last week.

Q: Can you say more about the withdrawal requests?

A: For example, we processed a higher-than-usual volume of withdrawals last week, but we have since seen an 88% decrease from peak to trough in daily withdrawal requests and expect this declining trend to continue.

Q: What do you make of what’s going on with the broader market? Does it make sense that we’ve seen the selloff we’ve seen?

A: Bitcoin and the cryptocurrency space was born out of a depression, a major financial event, but this is the first time that Bitcoin and this industry have been alive where it looks like we’re facing another macroeconomic depression. I’ve worked in other parts of fintech and traditional tech, and for anything that’s new, its resiliency is always questioned the first time that it’s existing when there’s one of these major events that happen roughly every decade. We’ll see what happens with the traditional market, but people are not feeling bullish. So does it make sense that crypto is here? It’s hard to say that without the benefit of hindsight. But what I’m highly confident in is that at some point in the future -- it might be six months or 18 months -- we’re going to look back at some point in time over the next few months and we’ll say, ‘That was a phenomenal time to buy.’ And the reason that’s going to happen is because there’s so much long-term growth still ahead for this asset class.

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