According to Axios, crypto giant FTX.US has agreed to acquire embattled lender BlockFi for up to $240 million. The deal also includes a $400 million revolving credit facility.
This is much higher than the $25 million figure announced by CNBC on Thursday.
It’s worth mentioning, however, that the $240 million deal is at the high-end of the price range, meaning the final price of the acquisition could drop significantly. Its final price will depend on the “performance trigger”. Shareholders will need to approve the acquisition.
Still, it’s a big come-down for the company that hit a $5 billion valuation last year.
In a Twitter thread, CEO Zac Prince said volatility in the crypto market led to the deal with FTX.US. He cites the collapse of hedge fund Three Arrows Capital & competing lender Celsius as the 2 main catalysts for his company’s financial troubles.
He said it was important to bolster a company’s balance sheet with additional funds to protect client funds.
Prince said he anticipates “improvements” to the company’s service through “increased partnerships”, adding that he is “extremely proud” of what that transaction has achieved.
BlockFi’s CEO pointed out that all of the company’s products continue to function normally, which is why it doesn’t need the above mentioned line of credit at this time.