On the 30th of June, the CEO of BlockFi revealed that the company would not be sold for $25 million. Zach Prince made this known to his 71 thousand followers on Twitter. Before the tweet, lots of speculations revealed that the company would be sold to FTX.
According to CNBC news, a deal between FTX and BlockFi had been struck already. CNBC claimed they got the news from three reliable insiders who wished to remain anonymous. One of the insiders revealed that BlockFi would be sold for $25 million. Another revealed that the company’s price tag was close to $50 million.
The fall of BlockFi
Notably, in June 2021, BlockFi was valued at a whopping $4.8 billion. However, things have changed a lot for the investment company. Just like Celsius and Three Arrows Capital, BlockFi have been affected by unfavorable market conditions.
The company’s valuation, which depends heavily on the valuation of crypto assets has plummeted with the market. This has made the company consider the acquisition option.
BlockFi Will be Sold, But not for $25 Million
A few hours after the BlockFi and FTX suspense, Zach Prince updated his audience on the situation. This time, he stated that an agreement has been signed with FTX which gives the crypto company an option to acquire BlockFi for $240 million.
Zach also revealed that BlockFi has a $400 million credit facility which is subordinate to all clients’ funds. This gives BlockFi a valuation of $680 million.
According to Zach, while BlockFi had no exposure to the Celsius network, BlockFi is feeling a speck of the negative events that affected the company. Also, the liquidation of 3AC’s large position with BlockFi could not totally prevent the loss of funds. BlockFi lost about $80 million in the process, although this figure is minute compared to what other big players have lost.
The downfall of Celsius and 3AC caused investors to panic. With the FUD in the air, many investors withdrew their funds from BlockFi. This left BlockFi with liquidity and financial issues.
The deal between BlockFi and FTX is yet to be concluded. BlockFi’s stakeholders will need to approve the acquisition before it is finalized.
