FTX Rumored to be Closing in on Deal to Buy Embattled Crypto Lender BlockFi

Antalya, Turkey - April 25,  2021: Close up shot of alt coins cryptocurrency over computer circuit.
ozgurdonmaz / Getty Images

Sam Bankman-Fried’s crypto exchange FTX, which has emerged as the savior of all things battered in this crypto winter, is reportedly about to close a deal to acquire embattled BlockFi, to which it had extended a $250 million revolving credit facility on June 21.  

See: 6 of the Best Crypto Jobs in 2022
Find: 8 Best Crypto Wallets

On June 30, CNBC reported that FTX would pay $25 million for the deal, which is 99% below BlockFi’s last private valuation — $4.8 billion.  

GOBankingRates reached out to a BlockFi spokesperson who referred to CEO Zac Prince’s tweet on June 30, which read:

“Lots of market rumors out there – I can 100% confirm that we aren’t being sold for $25M. I encourage everyone to trust only details that you hear directly from @BlockFi. We will share more w. you as soon as we can.”

And now, Bloomberg is reporting that BlockFi has been also approached by rival Ledn, a digital asset savings and credit platform, in a bid that would involve funding instead of a full acquisition and has been submitted to a BlockFi board member.

Building Wealth

“Given its operational strength, Ledn is currently evaluating a number of opportunities to broaden its leadership in digital asset lending and beyond,” Ledn Chief Executive Officer Adam Reeds said in a statement to Bloomberg. “At the moment, we cannot share any additional details.”

Earlier this month FTX came to BlockFi’s rescue: “Today we’re injecting $250m into BlockFi and partnering with them so they can navigate the market from a position of strength,” FTX CEO and billionaire Sam Bankman-Fried tweeted on June 21.

Earlier this month, Alameda Research, Bankman-Fried’s quantitative research firm, also came to the rescue of embattled Voyager Digital. It provided a cash/USDC-based credit facility with an aggregate principal amount of $200 million, as well as a second revolving credit facility for 15,000 in Bitcoin, according to an announcement on June 17.

Steve Bassi, co-founder and CEO of PolySwarm, a decentralized, crowdsourced threat-intelligence-security provider, told GOBankingRates that FTX and Sam Bankman-Fried “are a positive force for crypto, and they’ve done a tremendous job in helping to educate regulators on how best to regulate the industry.”

Building Wealth

“That said, I do worry about consolidation here,” Bassi noted. “What really needs to happen to besieged lenders like BlockFi is something that promotes greater resilience in lending practices. I hope that FTX brings good stewardship there in this regard. But as a whole, a key goal of our industry is permissionless, decentralized and transparent financial protocols. If anything, we should be doubling down on making DeFi more resilient and trustworthy as an industry. So kudos to Sam, but let’s continue building DeFi as well and, in turn, get more people to use it. The benefits are clear.”

The concern around consolidation in the crypto ecosystem is echoed by many in the industry.

Mostafa Al-Mashita, Executive Vice-President, Sales & Trading at digital asset brokerage Secure Digital Markets, agrees as well that Bankman-Fried and FTX have been an overall positive force for crypto.

“Their stepping in to buy up distressed crypto companies – while clearly doing so for business reasons – is also partly motivated in shoring up the industry during this downturn,” he said, adding that, however, “the one thing to keep in mind with this current news about acquiring BlockFi is that decentralization must remain the foremost goal in crypto.”

Building Wealth

POLL: Do You Have a Side Gig or Other Hustle?
Discover: 10 Surprisingly Affordable Places To Own Waterfront Property

“Decentralized and transparent financial protocols are the end game here, and fostering user growth in this aspect of the market should always be the focus. Looking forward, it’s important to double down on the DeFi industry, as it has remained robust despite the turbulence of the crypto market these past few months,” he said.

More From GOBankingRates

Share this article:

facebook sharing button
twitter sharing button
linkedin sharing button
email sharing button
Building Wealth

About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
Learn More


See Today's Best
Banking Offers