Crypto major FTX in talks to buy BlockFi for heavily discounted $25m

Cryptocurrency exchange FTX is in talks to buy embattled crypto lender BlockFi, last valued at US$4.8 billion, for as low as US$25 million, CNBC reported.

Citing three sources, the term sheet is almost done and expected to be signed by the week’s end. The deal could be priced at US$25 million or closer to US$50 million. The price tag could still shift before the term sheet is agreed on, the report noted.

Another source said BlockFi’s equity investors are “wiped out” and considering writing off the value of their losses.

News of the sale comes a week after FTX backed BlockFi with a US$250 million revolving line of credit. The loan was “contingent upon the execution of definitive documents,” according to a press statement by BlockFi, though they did not give further details.

The Wall Street Journal first reported that FTX was seeking an equity stake in BlockFi, while The Block later reported that the plan is to acquire the crypto lender outright.

Spokespeople from both crypto firms declined to comment to queries from publications. BlockFi CEO Zac Prince later tweeted that he can “100% confirm” that the company isn’t being sold for US$25 million.

The deal comes amid a downturn for crypto firms. BlockFi had just cut 20% of its workforce, amounting to roughly 170 jobs. The value of Bitcoin had also dropped for 12 straight weeks, from nearly US$49,000 in March 2022 to under US$21,000 currently.

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