Nexo

We’re Giving out 10 BTC in Rewards until the Bitcoin Halving

Learn More

BlockFi Will Be Acquired by FTX.US for Up to $240M

BlockFi has confirmed that FTX.US will be acquiring the firm for up to $240 million.

BlockFi Will Be Acquired by FTX.US for Up to $240M
Shutterstock cover by amiak (edited by Mariia Kozyr)

Share this article

BlockFi will also receive a $400 million rolling credit facility from FTX.US. 

BlockFi Inks Deal With FTX.US 

BlockFi has agreed to an acquisition deal with FTX.US. 

The crypto lender’s CEO Zac Prince took to Twitter Friday to announce the update, revealing that FTX.US would be buying the firm for up to $240 million based on certain “performance triggers.” Prince added that BlockFi would receive a $400 million rolling credit facility (it was previously revealed on Jun. 21 that FTX had offered BlockFi a $250 million credit line). The $240 million price tag marks a heavy discount from BlockFi’s previous valuation. The firm was valued at $4.8 billion after it raised funds in a private round in July 2021.

The news of the $680 million deal comes off the back of a rocky June for BlockFi. Prince said that “​​crypto market volatility” had negatively impacted BlockFi in the lead-up to the deal. Though he cited the insolvency issues Celsius and Three Arrows Capital faced, he clarified that BlockFi had no exposure to either firm. Instead, he said, the impact of Three Arrows’ sudden collapse led to a wave of withdrawals as customers lost faith in lending services, sparking BlockFi’s own insolvency crisis. On Jun. 16, it was revealed that BlockFi was one of several firms to liquidate Three Arrows as it failed to meet a margin call when the market crashed. Prince said that the Three Arrows saga “spread fear” in the market, before revealing that BlockFi suffered losses of $80 million in the fallout.

Prince further added that while the firms had agreed to a $680 million deal, BlockFi had not utilized any of the credit line. He then went on to explain how the firm engages in risk management practices and that it “fundamentally [believes] in protecting customer funds.” Protecting customers, Prince explained, was a key reason to add capital to the firm’s balance sheet.

Similar to BlockFi, the crypto lender Celsius also faced insolvency issues in June, but it instead opted to freeze customer withdrawals. The firm’s crisis is still ongoing. Other crypto lenders such as Babel Finance and CoinFLEX have also faced insolvency issues in recent weeks amid extreme market turmoil.

This story is breaking and will be updated as further details emerge. 

Share this article

Loading...