FTX exchange buys out BlockFi platform for $680 million

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

According to BlockFi CEO ZackPrince (Zac Prince), an agreement was concluded with FTX.US, which still must be approved by the service’s shareholders. The transaction itself will take place in several stages. 

First FTX.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 value to $680 million.

Zach Prince said that the reason for thisThe decision was “market events related to the Celsius service and the Three Arrows Capital cryptocurrency fund,” which had a negative impact on BlockFi. The company lost about $80 million in the Celsius service and, in order to “increase liquidity and protect user funds,” BlockFi management decided to enter into a deal with FTX.

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

It was previously reported that FTX plans to formalize a deal to purchase the BlockFi platform for only $25 million, with the company’s market valuation of $3 billion.