According to CEO Zac Prince, BlockFi signed agreements with FTX US totaling $680 million — for a company that had a $5 billion valuation in June 2021. It will give the crypto derivatives exchange the option to purchase the lending firm.
BlockFi CEO Zac Prince tweeted on Friday that the crypto lending firm had signed agreements with FTX US for a $400-million rotating credit facility as well as the option to attain BlockFi “at a variable price of up to $240 million based on performance triggers.” The CEO said the deal was grasped as part of an effort “to bolster liquidity and protect client funds” at BlockFi.
Though the agreements are still subject to shareholder approval. Prince said unpredictability in the crypto market, “particularly market events related to Celsius and 3AC,” which had a negative impact on BlockFi, directed to the decision. The crypto lending platform suffered roughly $80 million in losses the week following Celsius pausing withdrawals, and, after considering “various unattractive options” for recovery, partnered with FTX US.
Prince added,“All of our products and services — including funding and withdrawals, our trading platform, credit card, and global institutional services — continue to operate normally, with incremental capital strength behind them.”
In a Friday post, BlockFi criticized rumors from Thursday claiming FTX intended to purchase the firm for $25 million. the CEO, The CEO said a $400 million credit facility, $240 million acquisition price, and “other potential considerations” totaled $680 million — for a company that had a $5 billion valuation in June 2021. Prince implied the report was due to “an inappropriately leaked call” and “purely personal conjecture by a single party.”
BlockFi was among the first firms to liquidate some of Three Arrows Capital’s positions in June after the company reportedly failed to meet margin calls from its lenders. Amid the market downturn and extreme price volatility, the crypto lending firm declared that it would be laying off 20% of its 850-strong staff, retaining roughly 600 people. It’s uncertain if a FTX US acquisition would change this decision.
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