Blockfi CEO Says FTX Has an ‘Option to Acquire’ Crypto Lender at a Price of up to $240M

According to Blockfi’s co-founder Zac Prince, the institution has signed definitive agreements with the crypto steadfast FTX and the woody is presently up to shareholder approval. The woody represents a full of $680 million, but Prince besides noted that $240 cardinal of that full could beryllium utilized to get Blockfi astatine a adaptable terms up to that amount.

FTX Could Buy Blockfi for $240 Million, CEO Zac Prince Says Company Lost $80 Million From 3AC Exposure

Zac Prince, the co-founder of Blockfi, explained that his institution has travel to an statement with Sam Bankman-Fried’s crypto steadfast FTX. The woody is meant to “protect lawsuit funds” and is inactive taxable to shareholder approval. Prince disclosed that portion of the statement was a “$400 [million] revolving recognition installation which is subordinate to each lawsuit funds.” Furthermore, the Blockfi CEO added that FTX has “an enactment to get Blockfi astatine a adaptable terms of up to $240M based connected show triggers.”

Prince elaborate that Blockfi has not drawn connected the recognition installation yet and the institution raised involvement rates for its Blockfi Interest Accounts (BIAs). “Blockfi rates are expanding for BTC, ETH, USDC, GUSD, PAX, BUSD, and USDT crossed each complaint tiers,” the company’s complaint hike announcement notes. The Blockfi enforcement continued by explaining what enactment the institution successful its existent predicament, and helium mentioned the crypto lender Celsius and the crypto hedge money Three Arrows Capital (3AC). While Blockfi had zero vulnerability to Celsius, Prince said that Celsius freezing withdrawals caused a important “uptick successful lawsuit withdrawals” connected the Blockfi platform.

As acold arsenic 3AC, Blockfi did person vulnerability to the crypto hedge money that precocious filed for Chapter 15 bankruptcy. “[As] 3AC quality dispersed further fearfulness successful the marketplace … we were 1 of the archetypal to afloat accelerate our overcollateralized indebtedness to 3AC, arsenic good arsenic liquidate and hedge each collateral,” Prince remarked. “[Blockfi] did acquisition ~$80M successful losses, which is simply a fraction of losses reported by others.” The Blockfi CEO added:

This represents the afloat grade of the interaction to Blockfi from 3AC. We person nary further vulnerability and the constricted losses we did acquisition volition beryllium absorbed by Blockfi with nary interaction to lawsuit funds.

‘Clients Not Customers’ — Blockfi Was Presented ‘With Various Unattractive Options Where Client Funds Would Take a Haircut’

Prince said that the company’s 3AC losses volition beryllium a portion of the hedge fund’s “ongoing bankruptcy case(s)” and the Blockfi enforcement noted that much accusation connected those proceedings volition travel retired arsenic they travel to fruition. “As a reminder, our hazard model combines counterparty recognition analysis, collateral haircuts, and portfolio limits based connected accent testing, and we person zero lawsuit funds successful [decentralized finance] protocols,” Prince added.

Toward the extremity of Prince’s Twitter thread astir the definitive agreements with FTX, the CEO said that Blockfi’s main extremity has ever been focused connected protecting lawsuit funds. Prince further noted that it was important for Blockfi to bolster the company’s equilibrium sheet.

“We were presented with assorted unattractive options wherever lawsuit funds would instrumentality a haircut oregon beryllium down a lender successful the superior stack,” Prince revealed, explaining however Blockfi received assorted offers from different firms. “These alternatives were wholly unacceptable to me, [Flori Marquez] and our committee and struggle with our halfway worth of ‘Clients not Customers’ arsenic good arsenic the interests of Blockfi and our shareholders,” Prince concluded.

What bash you deliberation astir the Blockfi CEO’s Twitter thread regarding FTX giving a recognition enactment to the institution and the anticipation of acquiring Blockfi for $240 million? Let america cognize what you deliberation astir this taxable successful the comments conception below.