- FTX acquires BlockFi for “pennies on the dollar”, states CNBC.
- The deal is expected to be finalized by the end of the week.
After the news of Musk taking over Twitter, another acquisition that seems to have created a buzz on the internet is FTX acquiring BlockFi. On June 30, CNBC reported that FTX has closed in on a deal to buy BlockFi.
Sources of the Wall Street Journal shared that the crypto exchange, FTX has been in talks with the crypto lender, BlockFi to acquire an equity stake in the company. Discussions were underway for a week but both the parties were unable to reach an equity agreement. FTX also provided a $250 million emergency line of credit to the latter.
The acquisition process has not yet been completed as FTX is yet to finalize a term sheet. However, three sources on CNBC reported that a deal is expected to be signed by the end of this week. One of them has also said that such significant acquisitions may take up to multiple months to complete and the price tag can differ by a great extent at the end of the week.
It is interesting to note that FTX will take over the BlockFi at a price that is 99% below its previous valuation. We are yet to understand if this event will contribute to the recent market crash.
Spokespersons from both companies have refused to comment on the matter. The CEO of BlockFi, Zac Prince while talking about the $25 million figure, called it the “market rumors” in a tweet.
This revelation of this fire sale happens right after FTX gave an emergency line of credit to BlockFi. The aim to do so was to help the lender “navigate the market from a position of strength”, as stated by CEO of FTX Sam Bankman Fried.
The crypto sphere has been witnessing the fall of the big players since the crash started. After the downfall of Luna, the Celsius Network followed the same trend, and the news of the liquidation of the largest hedge fund in the market, Three Arrows Capital recently took over the market.