FTX Could Soon Purchase Stake in BlockFi: Reportadmin
- Crypto exchange FTX is in talks to purchase stake in BlockFi, according to reports from the Wall Street Journal today.
- BlockFi received a $250 million line of credit from FTX earlier this week, suggesting the firm is in need of funding.
- FTX and related companies have made other investments and acquisitions over the past several months.
Share this article
The popular crypto exchange FTX could soon purchase a stake in the lending firm BlockFi, according to the Wall Street Journal.
FTX Is in Talks With BlockFi
FTX and BlockFi are reportedly discussing the possibility of the former firm purchasing a stake in the latter.
Insiders suggest that discussions between the two companies are ongoing. No final decision has been reached and the amount of money under discussion has not been disclosed.
BlockFi secured a $250 million line of credit from FTX earlier this week. Zac Prince, CEO of BlockFi, stated that the loan would strengthen the firm’s balance sheet and platform strength.
Despite Prince’s positive spin on the deal, BlockFi’s decision to seek out a loan seems to point to financial issues. Plus, the firm liquidated its position in Three Arrows Capital (3AC) and cut 20% of its workforce this month.
Those events have collectively provoked rumors of low liquidity at BlockFi. As such, FTX’s possible decision to purchase a stake could provide BlockFi with much-needed funding.
FTX Is Investing in Other Firms
Sam Bankman-Fried, founder and CEO of FTX, has taken an interest in a number of other cryptocurrency companies.
Alameda Research, also headed by Bankman-Fried, has acquired a stake in the Canadian crypto brokerage Voyager Digital.
Additionally, Alameda extended a credit line of $200 million in cash and 15,000 BTC to Voyager this month. Those funds seem to be intended to help Voyager recover from a failed deal with Three Arrows Capital (3AC), to which it loaned that amount. Voyager claims that 3AC owed it $667 million.
In other deals this year, Bankman-Fried invested in Robinhood, gaining 7.6% stake for $648.3 million. FTX acquired Bitvo this month, while FTX.US acquired Embed Financial.
FTX appears to be in a strong position. CoinGecko ranks FTX as the second-largest fully trusted exchange, with $2 billion in trading volume over the past 24 hours.
Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other cryptocurrencies.