HomeNewsFTX is approaching an agreement to acquire troubled cryptocurrency lender BlockFi

FTX is approaching an agreement to acquire troubled cryptocurrency lender BlockFi

-

Key Features of this news —

  • FTX is near to completing a memorandum of understanding to purchase BlockFi, and a deal is anticipated to be finalized by the end of this week.
  • It occurred after FTX gave BlockFi a $250 million immediate credit facility.
  • BlockFi stock investors will be “wiped out” and forced to write down the value of their holdings because the price is far lower than the company’s most recent estimation.

BlockFi’s lender FTX is coming in to purchase it

Three individuals requested anonymity because the negotiations were private. According to them, the term sheet is virtually done and is anticipated to be approved by the end of this week. Another source estimated that FTX will offer about $25 million, which is 99 percent less than BlockFi’s most recent private value. A second source with firsthand experience of the transaction estimated the price to be nearer to $50 million. BlockFi, headquartered in Jersey City, New Jersey, was most recently evaluated at $4.8 billion.

FTX, Credit: FinTech Futures
FTX, Credit: FinTech Futures

According to the sources, the price may change between now and Friday. The closing of the purchase could take many months. In addition, the agreement might, subject to government clearance, result in choices for FTX to purchase BlockFi at a later stage. 

A week ago, FTX gave BlockFi a $250 million contingency credit facility. Now comes the fire sale. Sam Bankman-Fried, CEO of FTX, reported at the beginning that BlockFi will be able to navigate the industry from a position of strength thanks to the funding.

Market Condition 

It’s the newest setback for crypto lending businesses as the value of crypto assets continues to decline. As counterparties struggle to pay margin requirements, funds have experienced liquidity problems. Customer transactions were suspended by Celsius and CoinFlex because of extreme market environments. Three Arrows Capital, a significant virtual currency hedge firm, has filed for liquidation as well.

Ujan Chakraborty
Ujan Chakraborty
Nothing but Blue Skies.

LATEST POSTS

Big Eyes Coin might surpass Floki Inu and Dogecoin soon

The prevalence of meme coins  Dogecoin (DOGE) and Floki Inu (FLOKI) are two of the best-performing meme token projects. Still, we've also included a newcomer, Big...

Bitgert will have an optimistic growth in October

The cryptocurrency community is optimistic that October will be one of 2022's most explosive months. This month, most of the currencies are anticipated to experience...

Bitgert soars while BTC and ETH are still stumbling

One of the biggest price increases on the market has been reported by Bitgert (BRISE). In 2022, Bitgert will perform significantly better than both Ethereum...

Big Eyes Coin reached the $3 million mark giving DOGE and SHIB strong competition

Can Big Eyes Coin (BIG) defy convention and challenge the two mega-meme coin behemoth at the pinnacle of the crypto? The presale for Big Eyes...

Most Popular

spot_img