BlockFi is in talks with FTX, sources say

According to people familiar with the matter, Bloomberg FTX, the digital-asset exchange co-founded by Sam Bankman-Fried, is nearing an agreement to buy BlockFi Inc. after extending a credit line to the beleaguered criptocurrency lending platform.

CNBC reported earlier that FTX is paying around $25 million and that a term sheet is almost complete, citing unnamed sources. Zac Prince, chief executive officer of BlockFi, responded in a tweet, saying I can 100% confirm that we aren't being sold for $25 M. Prince didn't comment on whether BlockFi was in acquisition talks.

That price tag would be a big discount from BlockFi's $3 billion valuation in March 2021. It wanted to raise money at a reduced valuation of about $1 billion in early June. BlockFi is affected by a crunch in the industry and the troubles at Three Arrows Capital. It had acknowledged that it had liquidated a large client that didn't meet its obligations on an overcollateralized margin loan, without naming the client.

FTX agreed to provide a $250 million revolving credit facility to BlockFi earlier this month. Bankman- Fried has been acting as a lender of last resort for some troubled cripto-coin companies and has also provided credit lines to Voyager Digital Ltd., which is exposed to bad debt by Three Arrows.

BlockFi, based in Jersey City, New Jersey, recently cut its headcount by 20%, and its executive team, including founders Prince and Flori Marquez, took a pay cut due to market conditions.

A FTX spokesman said it wouldn't be commenting on the matter. A BlockFi spokesman referred to Prince's tweet when asked about the deal talks.

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