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FTX reaches agreement to blockfie up to $ 240M as CeFi lenders caught in market pressure – The Defiant

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FTX, the second-largest cryptocurrency exchange by trading volume, has signed an option to buy crypto lender BlockFi for $ 240M, BlockFi CEO Jack Prince said Friday.

Which is Prince in the contract Says Signed on Thursday, subject to shareholder approval and will also give BlockFi a $ 400M credit line. The deal gives FTX “an option to acquire BlockFi at variable prices up to 0 240M based on performance triggers.”

Prince did not say what those triggers were in a Twitter thread announcing the deal.

As crypto platforms are stuck in collapsing market pressures, Thursday’s move could make blockchain customers worried that the firm will collapse next.

Dismiss rumors

The announcement dispels rumors that FTX has offered to buy BlockFi for just $ 25M. Prince Denied This is true in a tweet on Thursday. Nonetheless, the news represents a dramatic change of fortune for BlockFi, which was valued at B 5B last year.

Prince stressed that customers do not risk losing their money. But the turmoil at Crypto Titan Celsius and Three Arrows Capital prompted BlockFi to seek a savior, he said.

Withdrawal Optic

Celsius, a direct competitor to BlockFi, stopped customer withdrawals last month, citing market volatility, a move that has begun to “increase the number of customers withdrawing from BlockFi’s platform even though we have no exposure to them,” Prince said. Says.

Then, as soon as the Three Arrows exploded, BlockFi lost $ 80M, Prince continued.

“It represents the full amount of impact from 3AC to blockchain,” the CEO said Explained. “We have no further exposure and the limited losses we have experienced will be exploited by BlockFi so as not to affect client funding.”

FTX bailout

In recent weeks $ 400M Credit Line Hall has offered a second FTX blockchain. Last month, FTX gave BlockFi a $ 250M credit line, sparking rumors that it could go the way of Celsius.

FTX has emerged as one of the last resort lenders in the crypto world, offering credit or directly to acquiring firms. Last year, it paid ড 120M in liquid, a Japanese crypto exchange, after it was hacked for M 100M. FTX later bought Liquid for undisclosed money.

Most recently, Alameda Research, the crypto trading firm Bankman-Fried, founded in 2017, gave Voyager Capital a credit worth about $ 500M. On Friday, Voyager announced that it, like Celsius, would temporarily suspend customer withdrawals “to protect the quality of the Voyage platform.”

Solid footing

Prince and FTX CEO Sam Bankman-Fried have repeatedly insisted that blockchain is in a strong position, Prince repeated a message in Friday’s announcement.
“We have not brought this credit facility to date and all our products and services continue to operate normally,” he said. Says. “It was important to add capital to our balance sheet to increase liquidity and protect client funds.”



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