Crypto
Bit Digital Borrows $50M from Galaxy Loan with 74% of Staked Ethereum
Bit Digital, an AI infrastructure company, has pledged 74% of its staked Ethereum (ETH) to Galaxy Loan for $50 million. The loan was made at a 5.45% interest rate on May 20.
The company converted 73,235 ETH into 66,192 Liquid Staking ETH (LsETH), the liquid-staking token it received in exchange. It then pledged 49,000 LsETH as collateral to Galaxy Loan and retained 17,192 LsETH as a buffer against margin requirements.
As part of the loan agreement, Bit Digital has 24 hours to add collateral after receiving a margin call from Galaxy Loan. If it fails to meet this requirement, Galaxy can partially liquidate collateral to restore the contractual level.