According to a report by CNBC, crypto exchange FTX, which was co-founded by billionaire Sam Bankman-Fried (aka “SBF”), is “close to finalizing a term sheet to buy BlockFi and a deal is expected to be signed by the end of this week.”
CNBC’s report, which was written by CNBC technology reporter Kate Rooney, stated that troubled crypto lending firm BlockFi, which — according to PitchBook — worth around $5 billion last year, could be sold to FTX for around $25 million, i.e. 0.5% of that valuation.
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The report went on to say:
“An acquisition could take multiple months to close, and the price tag could shift between now and Friday, a source said. Friday also marks the end of the quarter, which the person said was a catalyst for getting a deal signed. The Wall Street Journal first reported that FTX was seeking an equity stake in the company, while the Block reported this week that an outright deal was in the works.“
As CoinDesk reported on June 21, on that day, BlockFi issued a press release to announce that it had “signed a term sheet with FTX to secure a $250 million USD revolving line of credit providing BlockFi with access to further capital” and that “the proceeds of the credit facility are intended to be contractually subordinate to all client balances across all account types (such as BlockFi Interest Account*, BlockFi Personalized Yield, and BlockFi Loan collateral) at BlockFi and will be used as needed to further bolster BlockFi’s balance sheet, underscoring long-term stability for the company.”
SBF, who is Co-Founder and CEO of FTX, said at the time:
“BlockFi’s team has always demonstrated a strong bias towards prudent risk management and swift action. Protecting customer assets is their top priority which allows them to operate from a position of strength. FTX is excited to partner with BlockFi, a leader in the digital asset ecosystem, to offer first-class products to customers.“
And Zac Prince, Co-Founder and CEO BlockFi, stated back then:
“Today’s landmark announcement reinforces the commitment that BlockFi has to serving its clients and ensuring their funds are safeguarded. This agreement also unlocks future collaboration and innovation between BlockFi and FTX as we work to accelerate prosperity worldwide through crypto financial services. This is a significant step forward in our continued commitment to the strength and accessibility of cryptocurrency markets.“
This is how Gabor Gurbacs, who is Director for Digital Asset Strategy at MarketVector Indexes (a subsidiary of VanEck), congratulated FTX on its upcoming acquisition of BlockFi:
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