Bitcoin (BTC) Miner Riot Platforms (Riot) has won a $100 million credit contract with Coinbase credit arm to secure short-term funds for continuous expansion, using Bitcoin as collateral.
The published mining company said in a press release that it will be drawn into the facility over the next two months. The deal currently offers Riot worth over $1.8 billion.
“This credit facility is an important part of our efforts to diversify our funding sources to support our operations and strategic growth initiatives with the aim of creating long-term shareholder value,” CEO Jason Les said in a statement.
Loans issued by Coinbase Credits have variable interest rates. Borrowers pay at least 7.75% per year, calculated at 3.25% or the federal fund cap and 4.5%. The loan term is 364 days, but if Coinbase agrees, the riot may ask for a one-year extension.
The credit facility is protected by a portion of Riot’s total Bitcoin reserve. The company said it would use the funds “for general corporate purposes, pursuing key strategic initiatives.”
Coinbase is doing other similar transactions. Last week, healthcare technology company Semler Scientific (SMLR) announced that it had reached an agreement with Coinbase to borrow cash through loans protected by Bitcoin Holdings.
Another Bitcoin miner, Hut 8 (Hut), has also used Coinbase in the past to utilize Bitcoin support’s credit capabilities.
