By
Godfrey Benjamin
May 10th, 2024
FTX has been linked with virtually every crypto lender that has run into financial trouble this year.
Inside sources are claiming that the minimum price for which FTX exchange may acquire troubled crypto lender BlockFi, is $15 million. That is according to the deal on the table. However, that price may be subject to an upward review which will be largely dependent on BlockFi hitting some key performance targets.
FTX Exchange Sets Target for BlockFi
According to the sources, FTX could pay as much as $240 million to acquire BlockFi if the lender is able to get a key SEC approval and double its client assets.
In detail, if by the end of 2022, BlockFi is able to get an important regulatory clearance from the US Securities and Exchange Commission (SEC) for its BlockFi Yield product, then FTX will pay an extra $25 million.
Additionally, should BlockFi client assets reach $10 billion, then FTX US would have to cough up another $100 million. However, as of Q2, BlockFi is still short of half that amount, managing only $4.4 billion in the process.
Earlier reports had revealed that BlockFi initially received a $400 million credit line from the US arm of the exchange. It was also widely reported that FTX could activate the option to entirely acquire BlockFi for up to $240 million. But what was not reported was the part BlockFi will have to play for FTX to pay that much. Another detail that also did not receive much coverage back then is how little FTX could end up paying.
Going by the recent claims of the sources, FTX may be set to pay way below the $25 million figure that was reported by CNBC some months back.
Recall that at the time CNBC reported, BlockFi CEO Zac Prince was quick to debunk the claims. He tweeted:
“I can 100% confirm that we aren’t being sold for $25M.”
Prince is not giving up on possible alternatives though as he maintains that there may still be a way out.
In the Business of Saving the Industry
Interestingly, FTX has been linked with virtually every crypto lender that has run into financial trouble this year. So much so, that the firm’s billionaire founder Sam Bankman-Fried (SBF) swooped in on several occasions to save the day. His actions and that of FTX’s investment arm Alameda have also raised comparisons of how the firm operates like the J.P. Morgan of old. That is, in typical ways of an industry savior.