It appears that the deal that will see FTX exchange acquire troubled crypto lender BlockFi is finally in motion. According to a Friday announcement by the lending firm, a deal has been agreed with FTX US that will see BlockFi receive a $400 million revolving credit line from the US-based exchange platform.
FTX may acquire BlockFi at a total value of $680 million
Meanwhile, in addition to the credit line deal, there is another signed agreement that gives FTX the option of acquiring BlockFi at a price as much as $240 million. However, that agreement is also dependent on getting the nod from shareholders.
According to a statement by BlockFi CEO Zac Prince;
“This, together with other potential considerations, represents a total value of up to $680M.”
Like almost every other crypto-based firm, the lending firm has had to weather a very turbulent market period. Specifically on June 12, when news broke about Celsius facing liquidation.
Despite having no exposure to Celsius, the BlockFi platform saw an unprecedented surge in withdrawals as a result of customer fears. Within the same week, the liquidation of Three Arrows Capital 3AC impacted greatly on its operations. And due to the firm’s overcollaterized loan with 3AC, its liquidation caused BlockFi to lose no less than $80 million.
Client protection was always top priority — Zac Prince
Speaking about the deal with FTX, BlockFi CEO Zac claims that platform is highly invested in protecting customer assets. He recalls that the firm had a lot of options to choose from. However, some of the options would have ended up impacting customer funds one way or another. And this is “completely unacceptable,” says Zac. He insists that such a move would have gone against the firm’s core values.
Finally, the crypto lending firm found that FTX US shares a common client commitment vision, hence the deal. And according to the CEO, this is the best way forward for all stakeholders of the platform.