Riot Platforms Receives $100M Bitcoin-Backed Line of Credit from Coinbase

Bitcoin (BTC) mining company Riot Platforms (RIOT) has signed a $100 million loan agreement with Coinbase's lending arm, using bitcoin as collateral to secure short-term funding as part of its ongoing expansion.

The publicly traded mining company said in a press release that it plans to use the loan within the next two months. The agreement provides Riot, which currently holds 19,223 BTC worth over $1.8 billion, with a line of credit that allows it to avoid issuing new shares.

“This credit facility is an important part of our efforts to diversify our funding sources to support our operations and strategic growth initiatives to create long-term value for shareholders,” said CEO Jason Les.

The loan provided by Coinbase Credit has a variable interest rate: borrowers must pay at least 7.75% interest per annum, which is defined as the greater of 3.25% or the federal funds rate cap plus 4.5%. The loan term is 364 days, but Riot can request a one-year extension if Coinbase agrees.

The credit facility is secured by a portion of Riot's total bitcoin reserves. The company said it intends to use the funds “to pursue key strategic initiatives and achieve overall corporate goals.”

Coinbase has also made similar deals in the past. For example, just a week ago, medical technology company Semler Scientific (SMLR) announced it had reached an agreement with Coinbase to borrow cash through a loan secured by its bitcoin.

Hut 8 (HUT), another Bitcoin miner, also previously used a Bitcoin-backed line of credit from Coinbase.

Source: cryptonews.net