BlockFi CEO Will Not Sell to FTX for $25M
- BlockFi suffered huge losses after 3AC’s collapse.
FTX’ acquisition of the embattled crypto lender, BlockFi, has been one of the biggest news in the crypto space. Reports suggest that the deal could be sealed as soon as possible, but BlockFi’s CEO, Zac Prince, took to Twitter to dispute claims that his firm will be sold for $25 million. His company was previously valued at $4.8 billion, so the rumors came as a surprise. A post he wrote on Twitter read,
Lots of market rumors out there – I can 100% confirm that we aren’t being sold for $25M. I encourage everyone to trust only details that you hear directly from @BlockFi. We will share more with you as soon as we can.
FTX is reportedly planning to purchase BlockFi for 99.5 % less than its prior valuation, according to CNBC. Although the agreement is anticipated to be inked by Friday, the terms are supposedly still susceptible to revision.
Given that BlockFi was valued at $4.8 billion in July 2021 and was anticipated to go public, the $25 million sales would be remarkable. BlockFi was still valued at about $1 billion in early June 2022, despite the Terra-led decline in the cryptocurrency market.
BlockFi suffered huge damages following the Three Arrows Capital decline. The company received a loan of $250 million from FTX to ensure its users won’t suffer from its exposure to 3AC. Three Arrows Capital gained notoriety in the industry for its claim that Bitcoin would face % price declines. The crypto hedge fund went bankrupt amid the most recent market collapse.
FTX is Becoming Crypto’s Last Resort
FTX is already building a reputation for offering help to struggling companies but with plans to negotiate. Its expected acquisition of BlockFi follows a similar strategy it used to purchase Japanese fintech firm, Liquid Group. Reports state that FTX had agreed to an unknown sum to acquire the firm in April. The crypto exchange brought in $120 million as a bailout for the Japanese firm after it suffered a $90 million loss following a hack.
The acquisition of BlockFi will strengthen FTX CEO Sam Bankman-position Fried’s as the top lender of last resort for crypto projects. His second business, trading company Alameda Research, recently provided cryptocurrency exchange Voyager with a $600 million loan. Voyager was also affected by the liquidation of Three Arrows Capital.