FalconX and Ethena launch $1 billion institutional lending facility

Cryptocurrency broker FalconX and stablecoin protocol Ethena have partnered to launch a secured lending facility.

The launch was announced by the two firms, which gives large crypto investors a new credit channel built around bank-style custody controls.

How will Falcon X and Ethena’s facility work? 

FalconX and Ethena have announced that they are partnering to release a $1 billion secured lending facility in which money would move through a dedicated special purpose vehicle (SPV) rather than a direct loan between the two companies. 

FalconX will maintain a role as the originator, servicer and collateral manager, while the collateral behind each loan sits with qualified custodians.

Ethena is the main lender in a revolving credit deal. The borrower is a FalconX company called FalconX International Lending Opportunities SPC, which is structured so its assets stay separate and safe even if FalconX goes bankrupt.

FalconX International Lending Opportunities SPC uses Ethena’s money to buy crypto loans from FalconX and then hands those loans over to Ethena as collateral, giving it a chance to get its money back first if there’s a problem. 

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