Cryptheory – Just Crypto

Cryptocurrencies are our life! Get an Overview of Market News

FTX Agrees to Buy BlockFi With 99% ‘discount’

2 min read


Last week, Cryptheory reported that cryptocurrency exchange FTX was preparing to acquire a stake in cryptocurrency lender BlockFi.

Now, it appears that the exchange led by billionaire Sam Bankman-Fried has closed a deal to acquire the New Jersey-based company for just $25 million.

Anonymous sources told CNBC that the parties have virtually concluded the agreement. Signatures are expected to take place by the end of the week.

FTX to buy BlockFi

It is worth noting that the amount that FTX will pay for the company  is 99% below BlockFi’s last private valuation. According to PitchBook data, BlockFi was last valued at $4.8 billion.

While everything appears to be lined up for the acquisition, closing the deal could take months. After all, it depends on approvals.

In addition, the source reported that the price could change until the end of this week, when the second quarter of 2022 ends.

Regarding the alleged deal, an FTX spokesperson said the company “would not comment on the matter.” Meanwhile, BlockFi said the company “does not comment on market rumors”.

FTX rescues BlockFi

The alleged sale comes shortly after FTX earlier this week bailed out BlockckFi, which faced liquidity problems.

In the case, the digital asset exchange secured a $250 million emergency line of credit from the company. According to the BlockFi the measure reinforced the balance and strength of the platform.

“Proceeds from the line of credit must be contractually subordinated to all customer balances across all account types (BIA, BPY and loan guarantee) and will be used as needed,” the company said on June 21.

At the time of the rescue, both BlockFi CEO Zac Prince and Bankman-Fried hinted at the possibility of greater cooperation between the organizations.

“This agreement also unlocks future collaborations and innovations between BlockFi and FTX. Meanwhile, we work to accelerate prosperity around the world through crypto financial services,” tweeted BlockFi CEO Zac Prince at the time.

FTX gives up on buying Celsius

Also on Thursday (30) came the news that FTX had given up on acquiring troubled cryptocurrency lender Celsius.

The exchange reportedly attempted a deal with the company, but backed out after reviewing Celsius’ finances. Sources said the company had a $2 billion “hole” on its balance sheet and FTX found it difficult to deal with.

Celsius has struggled for survival since it stopped all user withdrawals on June 12. At the time, the company cited “extreme market conditions” as a reason for the action, but gave no further details. Customer funds have remained locked up ever since.

NFT overview – Pharrell Williams Becomes Brand Director for NFTs Doodles Project

All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

Leave a Reply