Binance Pool has launched a $500 million lending project aimed at helping crypto miners keep their heads above water amidst the devastating crypto winter.
The project, which is the first of its kind for Binance Pool, was designed “to provide debt financing services” to public and private blue-chip bitcoin miners and global digital asset infrastructure companies.
“In light of current market conditions, Binance Pool is launching a $500million lending project to support crypto miners and digital infrastructure providers.” Binance wrote in a Friday blog .”As one of the world’s leading crypto mining pools, Binance Pool has a responsibility to help maintain a healthy digital asset ecosystem.”
As per the announcement, applicants will have to pledge security in the form of physical or digital assets for 18-24 months. Further, the loan will attract interest rates ranging from 5% to 10%. As per the exchange, Binance pool would soon launch cloud mining products requesting cloud mining vendors to work with it to boost the cloud mining hash.
The announcement comes as the rout in crypto prices continues to weigh heavily on the mining industry. Following the sharp drop in Bitcoin and other cryptocurrency prices, miners have struggled to keep their mining activities running. Some have been forced to liquidate their BTC holdings to pay operating costs and loan instalments. To make things worse, Bitcoin’s hash rate worsens after soaring to an all-time high on Monday.
So far, public mining companies Riot Blockchain and Marathon Digital’s shares have also plummeted by about 70% and 65% year-to-date. Last week, London-based Bitcoin mining firm Argo Blockchain was forced to sell some of its shares to a sole investor for $27 million to ease liquidity pressures and keep its operations up. In September, Computer North, one of the leading crypto mining firms, filed for bankruptcy after it failed to meet its obligations on a $500 million loan owed to more than 200 creditors.
Meanwhile, apart from Binance, various crypto companies have also been offering to bailout miners. Last month, the Decentralized Finance platform Maple Finance launched a lending pool for cash-beleaguered miners with up to 20% interest. Earlier this month, crypto investments firm Grayscale debuted a co-investment vehicle aimed at helping investors acquire bitcoin mining infrastructure amidst the ongoing crypto winter.
