FTX signed an agreement with crypto lender BlockFi

FTX signed an agreement with crypto lender BlockFi

FTX has signed an agreement with cryptocurrency lender BlockFi.

The deal gives FTX the ability to buy blockchain at a maximum price of $ 240 million, the company announced Friday. Deal pricing is based on specific performance goals. The company did not offer a minimum price for the deal.

The term sheet will be signed this weekend, CNBC reported Thursday, with a source saying it could be as low as 25 million. Even at the high end of FTX’s deal price, it represents a significant drop in BlockFi’s value. The Jersey City, New Jersey-based company was last valued at $ 4.8 billion, according to Pitchbook.

The term sheet pads the blockchain’s balance sheet with large debts.

FTX increased its previous सुविधा 250 million revolving credit facility to a total of $ 400 million. BlockFi executives said the company has not focused on this credit facility to date and “all of our products and services continue to operate normally.”

FTX CEO Sam Bankman-Fried is seen as a lender as a last resort in space. In addition to BlockFi, Bankman-Fried’s company Alameda Research lent Voyager $ 500 million.

Why BlockFi agreed to move the deal forward, the company pointed to volatility in the crypto market and the failure of hedge fund Three Arrow Capital. It also drew attention to the troubled crypto company Celsius, which froze customer deposits two weeks ago citing “extreme market conditions”. Despite not being in touch with Celsius, BlockFi said there was an increase in client withdrawals that week.

BlockFi said it had incurred a loss of $ 80 million “which is a small fraction of the loss publicly reported by other lenders.” Its losses, along with the hedge fund, will be part of Three Arrows’ ongoing bankruptcy case, the company said.

“Outside of this transaction, we realize that there is a lot of fear, uncertainty and doubt in the crypto market,” said Block Prince CEO Zac Prince. “From our comfort point, we see a healthy ecosystem growing.”

Sneha Mali

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