Report: Crypto Exchange FTX is in talks to acquire a stake in BlockFi.
According to the article, FTX and BlockFi have not finalized an equity deal yet, and conversations are ongoing.
The Wall Street Journal reported that cryptocurrency exchange FTX is in discussions to purchase a stake in crypto lender BlockFi, citing people familiar with the situation.
The firm earlier stated on Tuesday that BlockFi had signed a term sheet with FTX for a $250 million (about Rs. 1,955 crore) revolving credit facility, which will provide BlockFi with critical access to money in the midst of a digital currency market crash.
According to a recent Wall Street Journal story, no equity deal has yet been struck, and conversations are ongoing.
A BlockFi spokeswoman said in a statement that the business “does not comment on market speculations.”
“We are still discussing the parameters of the agreement and cannot provide any further information at this time. We expect to share additional information about the deal’s conditions with the public at a later date “According to a BlockFi spokeswoman.
A representative for FTX did not reply quickly to a request for comment.
BlockFi said last week that it was decreasing its personnel by around 20%, in addition to taking other cost-cutting initiatives such as lowering the marketing budget and CEO salaries.
The US Federal Reserve’s aggressive rate rises, along with recession worries, have caused instability in markets and a sell-off in cryptocurrencies. Bitcoin, the world’s largest cryptocurrency, fell below the critical $20,000 (roughly Rs. 15.6 lakh) barrier last weekend for the first time since December 2020.
BlockFi’s Chief Executive Officer, Zac Prince, previously announced on Twitter that the firm has signed a term sheet with FTX to establish a revolving credit facility. In the following tweet, Prince affirmed that the monies obtained from FTX will be utilized to assure liquidity for consumers investing funds into the project.
The freshly acquired credit facility, according to BlockFi’s CEO, is critical in maintaining the company’s operating efficiency against the enormous slump in the larger crypto industry. He advocated that the loan give the firm with funds that would help to strengthen its balance sheet and overall platform strength.