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FTX is looking at a possible acquisition of crypto lending firm, BlockFi. The CEO of the crypto derivatives platform, Sam Bankman-Fried, issued a $250 million credit facility to BlockFi. Reports on social media had it that FTX would acquire BlockFi for just $25 million.
FTX set to acquire BlockFi
A report by CNBC said that anonymous sources had revealed that FTX and BlockFi were almost finalizing a deal where FTX would pay around $25 million to acquire BlockFi. The report was shocking given that BlockFi, once ranked as one of the best DeFi lending exchanges, was last valued at $4.8 billion before the market dip.
The CNBC report further disclosed that one source believed the deal would take time before being finalized. There was also a possibility that the deal’s financial terms could change as the markets entered the third quarter.
The term sheet set to be signed before the week ended did not have a “shop clause.” Moreover, several offers were being considered. Once this deal is finalized, it will trigger major losses for equity investors and other strategic individuals within BlockFi. One of the investors has reportedly planned to counter the offer.
The CEO of FTX, Zac Prince, has revealed that the reports on the acquisition happening for a mere $25M are false. On Friday, Prince posted a Twitter thread saying that the crypto lending firm signed a deal with FTX for a revolving credit facility of $400 million. The deal also included an option to acquire the crypto lender for up to $240 million based on performance factors.
Prince said this deal would allow the crypto lender to boost liquidity and protect its client’s funds. The CEO also said that the lender had been affected by the collapse of the Celsius Network and Three Arrows Capital. The latter filed for bankruptcy in the British Virgin Islands.
FTX will not acquire Celsius
While FTX seems to be bailing out struggling crypto companies, the exchange has backed out of a deal with the Celsius network. According to a report by Block, FTX was not interested in Celsius because it was “difficult to deal with.”
It is reported that Celsius has a gap of $2 billion in its balance sheet. With the company’s troubles and the declining value of the CEL token, it is expected that FTX could not have found any financial viability in investing in Celsius.