BlockFi Outlines Acquisition Path With FTX U.S.

Crypto trading and lending firm, Blockfi, announced on July 1st, 2022 a deal with FTX U.S. that would provide the firm with a $400 million revolving credit line that outlines the path to an acquisition. The agreement is now subject to shareholder approvals which would provide FTX an option to acquire the firm at a price up to $240 million. 

"This, together with other potential considerations, represents a total value of up to $680M," the firm said in an emailed statement. 

According to a Twitter thread posted by the CEO of BlockFi, Zac Prince, a few events led up to this deal. Crypto market volatility and market events related to Celcius and 3AC, had a negative impact on Blockfi. Since the Celsius news broke on June 12th, there’s been an uptick in client withdrawals from BlockFi’s platform. BlockFi said that the current deal with FTX would allow it to protect customer assets on the platform. 

Although BlockFi was among the first to accelerate their overcollateralized loan to 3AC, as well as liquidate and hedge all collateral, the company still experienced $80M in losses. Prince says that this represents the full extent of the impact to BlockFi from 3AC.

"Ultimately, we found a great partner in FTX U.S., who shares our commitment to clients. This represents the best path forward for all @BlockFi stakeholders and the crypto ecosystem as a whole," Prince went on to write.