After a $250M Bailout, FTX looks to Secure a Stake in BlockFi
- According to BlockFi’s spokesperson, the lending platform still wants to evaluate and negotiate the terms of the proposal by FTX.
Cryptocurrency trading platform FTX has started negotiations with BlockFi in a bid to secure a stake in the crypto lending project. This development is coming a few days after the derivative exchange bailed out BlockFi from its liquidity turmoil. Now, FTX is making efforts to own shares in the BlockFi lending project.
Recently, FTX released a whooping sum of $250 million credit to BlockFi. As of publication time, the negotiation towards taking a stake in BlockFi is still ongoing and no terms have been agreed upon.
According to BlockFi’s spokesperson, the lending platform still wants to evaluate and negotiate the terms of the proposal by FTX. He, however, failed to shed more information about what the proposed partnership may look like if successful. According to him, BlockFi will surely publicize the details of the about-to-be negotiated deal at a later time
BlockFi and FTX work together
However, the CEO of the lending project, identified as Zac Prince, had in the wake of the $250 million bailouts by FTX called for more collaborations between the two firms. In a June 21 tweet, Prince hinted that the agreement between FTX and BlockFi helps to pave the way for future partnerships and innovations between both firms. According to the CEO, such collaboration is necessary to foster global prosperity for FTX and BlockFi.
More so, he explained that the terms of the credit taken by BlockFi from FTX emanated in both offensive and defensive parts. Prince recalled how the lending platform witnessed overwhelming rates of withdrawals in the past week, a development which he claims affected the firm.
According to him, the “higher-than-usual volume” of withdrawals became obtainable immediately after the news about Celsius dominated the airspace. Recall that Celsius had since the past two weeks temporarily halted withdrawals on its network. However, till today, the lending platform is yet to communicate with its users about the next line of action.
BlockFi users, however, reportedly felt a similar fate would befall the lending platform and thus resolved to heavy withdrawals of their funds. BlockFi CEO said the need to balance the sheet with a big number following the heavy withdrawals necessitated the credit from FTX.
As of publication time, Bankman-Fried, the CEO of FTX is yet to make comments on the potential BlockFi stake acquisition by the exchange. Although, he recently reiterated the commitment of FTX in providing robust liquidity for crypto startups experiencing turmoil in courtesy of the prevailing bear market.