FTX is plunging to buy crypto lender BlockFi for a penny in dollars, sources told CNBC.
The termsheet is almost above the finish line and will be signed by the weekend, according to three sources. According to one source, FTX is expected to pay about $ 25 million, 99% below BlockFi’s previous personal rating. Another person who knows the deal directly has fixed the price close to $ 50 million. According to PitchBook, the final value of BlockFi, based in Jersey City, NJ, was $ 4.8 billion.
Price tags may change between now and Friday, sources said. It may take several months for the acquisition to complete. The person added that the transaction could be an option to acquire BlockFi at a later date, awaiting regulatory approval.
Friday will also be the end of the quarter. According to one source, this triggered the signing of the transaction.The Wall Street Journal is published by FTX Ask Company equity stake, block This week we reported that a full deal is underway.
A FTX spokeswoman said the company “will not comment on this issue.” A BlockFi spokeswoman said the company “has not commented on market rumors.” BlockFi CEO Zac Prince pushed the $ 25 million back in a tweet calling the number “market rumors.”
The fire sale will take place a week after FTX provides BlockFi with a $ 250 million emergency loan facility. FTX CEO Sam Bankman-Fried said at the time that this funding would help BlockFi “navigate the market from a strong standpoint.”
This is the latest fallout for crypto lenders as the prices of crypto assets plummet. Funds are suffering from liquidity issues because counterparties cannot handle margin calls. Celsius and CoinFlex have suspended customer withdrawals due to “extreme market conditions”. CNBC, a major cryptocurrency hedge fund Three Arrows Capital liquidated report Previously, it marked one of the biggest victims of the crypto bear market.
BlockFi’s equity investors have been “cleaned up” and are now canceling out the value of their losses, according to another source. Since there was no “shop clause” in the term sheet, multiple offers are being considered.
“There were multiple transactions on the table,” a source told CNBC.
Billionaire Bankman Fried has been regarded as the lender of last resort in this area. In addition to BlockFi, Bankman-Fried’s company Alameda Research sponsored $ 500 million loan to Voyager.
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