According to CNBC, cryptocurrency exchange FTX is negotiating to purchase troubled crypto lender BlockFi, last valued at US $4.8 billion, for as little as US $25 million.
According to three sources, the term sheet is nearly finished and will probably be signed by the end of the week. The transaction may cost $25 million or more like $50 million. Before a term sheet is signed, the price may change, according to the article.
According to a different source, equity investors in BlockFi are “wiped out” and contemplating deducting the value of their losses.
A week after BlockFi received a US $250 million revolving lines of credit from FTX, news of the transaction broke. According to a news release from BlockFi, the loan was “conditional to the execution of definitive agreements”. However, they did not provide any other information.
The deal happens as crypto businesses are experiencing a slowdown. A total of 170 positions, or 20% of BlockFi’s employees, were recently eliminated. In addition, Bitcoin’s value has decreased for 12 weeks in a row, from around US $49,000 in March 2022 to less than US $21,000 at the moment.
