FTX to Acquire BlockFi For $25M (99% Discount)

Sam Bankman-Fried’s crypto company FTX is on track to acquire troubled cryptocurrency lending firm BlockFi for $25 million, CNBC reported Friday.

The deal, expected to conclude as soon as this week, will reportedly see BlockFi sold at a steep discount (more than 99%) to the $4.8 billion valuation recorded in its last funding round. The rumors come less than a week after the startup received a $250 million credit line from FTX to deal with its liquidity crisis.

FTX’s potential acquisition of BlockFi would wipe out the value of investments by other private round backers, including Anthony Pomliano’s investment firm, Pomp Investments, Bain Capital Ventures, and Tiger Global. 

BlockFi’s rumored impending acquisition would mark a steep downturn in the fortunes of yet another centralized crypto lender. Close competitors Celsius and Voyager Digital have suffered a similar crisis, with the former still holding customer funds hostage.

FTX’s potential BlockFi bailout (credit line and acquisition) will at least ensure that the company fulfills its credit obligations to customers. FTX had also extended a similar helping hand to Voyager Digital after the company announced an over $660 million failed loan deal with Three Arrows Capital (3AC).

BlockFi Denies $25 Million Acquisition News

Following CNBC’s report, BlockFi CEO  Zac Prince denied allegations that the company was being sold for $25 million. Notably, the tweet did not deny that deliberation on a potential acquisition was underway.

Meanwhile, BlockFi continues to assure customers that operations will continue as usual despite current bearish market conditions and a max exodus of users from centralized lending platforms. Earlier this week, the company raised interest rates across its products.

Update: This article has been updated to include information that BlockFi CEO Zach Prince denied any potential acquisition for the quoted amount.