August 14, 2022

FTX exchange buys out BlockFi platform for $680 million

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FTX exchange buys out BlockFi platform for $680 million

Rumors about the purchase of the FTX.US crypto exchange of the BlockFi loan service turned out to be true. However, in fact, the amount is more impressive - instead of $25 million, the deal will cost the exchange $680 million.

According to BlockFi CEO Zac Prince, an agreement has been reached with FTX.US, which is yet to be approved by the service's shareholders. The transaction itself will take place in several stages.

FTX first.The US will allocate $400 million to the service so that BlockFi can fulfill its financial obligations. In addition, the exchange will receive an option to buy BlockFi “at a likely price of up to $240 million, depending on the performance of the service.” There are also “some potential opportunities” that could bring the deal to $680 million.

Zach Prince said that the reason for this decisionwere "market events related to the Celsius service and the Three Arrows Capital cryptocurrency fund" that had a negative impact on BlockFi. In the Celsius service, the company lost about $80 million, and in order to “increase liquidity and protect user funds,” BlockFi decided to make a deal with FTX.

“All of our products and services, including replenishmentand withdrawals, our trading platform, credit cards and global institutional services will continue to operate as usual, and with greater financial backing,” said BlockFi CEO.

Earlier it was reported that FTX plans to complete a deal to buy the BlockFi platform for just $25 million, with a market valuation of the company at $3 billion.