FTX US deal with troubled crypto lender BlockFi floats acquisition with ‘up to’ $240M purchase price

Published by
Peter Kavinsky

Sam Bankman-Fried’s FTX is taking advantage of rampant instability in the crypto lending market to assert itself while propping up major institutions.

The company’s US-based arm has a deal in place with troubled crypto lender BlockFi that gives them the option to buy the startup, recently valued at $2 billion, for up to $240 million based on the startup’s performance. BlockFi CEO Zac Prince did not disclose what the low end of the deal could look like in a thread disclosing the term sheet on Twitter. This announcement comes after a CNBC report yesterday pegged the deal at $25 million.

Alongside the potential for an acquisition, with the deal FTX US is giving BlockFi a $400M revolving credit facility to shore up its finances in the midst of market uncertainty.

https://twitter.com/BlockFiZac/status/1542934040092856321?ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow noopener

It’s a dramatic turn for the centralized exchange which allowed users to buy, sell and earn cryptocurrencies. In a thread, Prince pointed to”[c]rypto market volatility, particularly market events related to Celsius and 3AC” as catalysts for the company’s financial troubles which led to clients withdrawing their funds from the platform. The crypto hedge fund 3AC’s ongoing collapse led to roughly $80 million in losses for BlockFi, Prince notes.

While the deal appears to be far from a happy ending for BlockFi’s venture backers, it’s likely a breath of relief for customers still holding funds with the lender.

“As a matter of principle, we fundamentally believe in protecting client funds. Not only because it’s absolutely the right thing to do, but this also benefits the ongoing health and adoption of crypto financial services worldwide,” Prince says.

For FTX CEO Sam Bankman-Fried, the deal represents another opportunity for his crypto exchange to expand its ambitions as its chief stateside competitor reels from the pains of its boom and bust on US public markets.

Subscribe to TechCrunch’s crypto newsletter “Chain Reaction” for news, funding updates and hot takes on the wild world of web3 — and take a listen to our companion podcast!

Source: TechCrunch

Peter Kavinsky

Peter Kavinsky is the Executive Editor at cablefreetv.org

Share
Published by
Peter Kavinsky

Recent Posts

  • News

2022 Montana High School Football Scores

Click Here to Watch this High School Football Live Online for Free! Recent 2022 Montana…

3 mins ago
  • News

Car crashed into a tree and fell down the slope – two dead

Terrible accident at Villigen AG - two dead, two seriously injured The car crashes into…

8 mins ago
  • News

Ukraine’s forces destroyed bridges across the Dnieper and blocked Russian supplies in the Kherson region

Ukraine's armed forces have destroyed ground connections, which, if it is impossible to restore them,…

8 mins ago
  • News

Naked attraction: In Britain, a TV show where love is chosen by penis size became a hit

"Naked Attraction" refers to the "dating show" genre popular on Western television.Naked Attraction ("Naked Attraction")…

15 mins ago
  • News

Men’s 4×100 freestyle team set a new Spanish record | Sports

The Spanish men's 4x100 freestyle team set a new Spanish record with a swim of…

16 mins ago
  • News

Covid alert on symptom of new strain affecting patients at night

An immunologist has warned that the new strain of Covid-19 could be causing different symptoms…

17 mins ago