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BlockFi
BlockFi

BlockFi announces deal with FTX US

According to CEO Zac Prince, BlockFi signed agreements with FTX US totaling $680 million — for a company that had a $5 billion valuation in June 2021.

FTX US has inked a deal with BlockFi that will give the crypto derivatives exchange the option to purchase the lending firm.

In a Friday Twitter thread, BlockFi CEO Zac Prince said the crypto lending firm had signed agreements with FTX US for a $400-million revolving credit facility as well as the option to acquire BlockFi “at a variable price of up to $240 million based on performance triggers. The purpose of the deal, according to the CEO, was to provide liquidity and protect investors.

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The agreements are still subject to shareholder approval. Prince said volatility in the crypto market, “particularly market events related to Celsius and 3AC,” which had a negative impact on BlockFi, led to the decision.

The crypto lending platform suffered roughly $80 million in losses the week following Celsius pausing withdrawals, and, after considering “​​various unattractive options” for recovery, partnered with FTX US.

“All of our products and services — including funding and withdrawals, our trading platform, credit card and global institutional services — continue to operate normally, with incremental capital strength behind them,” said Prince.

BlockFi was one of the first firms to liquidate some of Three Arrows Capital’s positions in June after the company reportedly failed to meet margin calls from its lenders.

RELATED : 3AC Files for Bankruptcy as Voyager Digital Suspends Withdrawals

About Hama Amefiz

Amefiz is a professional blockchain, cryptocurrency and tech journalist, regular contributor to newsbsc.com who is writing analysis about the latest developments in the cryptocurrency and blockchain space.

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