Cryptocurrency exchange FTX is reportedly about to purchase Blockfi for $25 million, according to news reports, but the chief executive of the troubled fintech disputed the figure.
The term sheet is almost over the finish line and expected to be signed by the end of the week, CNBC reported on June 30, citing a source who asked not to be identified.
FTX will pay roughly $25 million — 99% below BlockFi’s last private valuation. Jersey City, N.J.-based BlockFi was last valued at $4.8 billion, according to PitchBook.
An acquisition could take several months to close, and the price could shift between now and Friday, CNBC said.
FTX did not immediately respond to a request for comment. Blockfi said in a statement that it does not comment on market rumors.
"Lots of market rumors out there - I can 100% confirm that we aren’t being sold for $25M," Blockfi's CEO Zac Prince said on Twitter. "I encourage everyone to trust only details that you hear directly from @BlockFi. We will share more w you as soon as we can."
BlockFi, which promised to compete with traditional banks, recently had to cut 20% of its workforce to adapt to a macroeconomic environment undermined by fears of recession and inflation at its highest in 40 years.
Crypto Savior
The company has been hit hard by falling cryptocurrency prices and the collapse of sister tokens Luna and UST.
The firm had loaned a large sum of money to crypto hedge fund Three Arrows Capital (3AC). However, the latter has suffered colossal losses linked to its exposure to Luna and missed lender margin calls, meaning it couldn't come up with what it owed to its lenders.
FTX CEO Sam Bankman-Fried has become the savior of the struggling crypto industry. Bankman-Fried’s company Alameda Research recently provided a $500 million loan to Voyager, a digital asset broker.
Robinhood Markets (HOOD) shares recently surged, before being halted from trading on the Nasdaq, amid reports that the cyrptocurrency group FTX is looking to purchase the online brokerage firm.
FTX and Binance, the world's largest cryptocurrency trading platform by volume, both recently announced they were hiring at a time when many cryptocurrency companies were laying off employees.
Some posters on Twitter expressed concerns about their holdings.
"@BlockFiZac- Please confirm Stablecoin deposits are safe and protected regardless of what is happening with BlockFi Corp," one person asked on Twitter.
"Hi Zac are our assets still safe there?" one commenter asked.
"No they’re not. Take them out whilst you can. Many were told this with Celsius and see what happened," another person responded, referring to cryptocurrency loan company Celsius Network, which suspended fund withdrawals and other operations from its platform.
