News

FTX Is Being Prevented From Acquiring BlockFi

FTX’s proposal to rescue $250 million for BlockFi, if approved, could destroy the interests of the company’s shareholders, forcing them to act.
FTX Is Being Prevented From Acquiring BlockFi 3

As reported by CoinCu, the BlockFi lending unit is one of the companies affected by the current liquidity crisis in the cryptocurrency market. Recently, BlockFi revealed that it has reached an agreement with billionaire Sam Bankman-Fried cryptocurrency exchange FTX for a loan of $250 million.

However, according to a confidential source of CoinDesk, the hedge fund Morgan Creek Digital is rushing to raise $250 million from interested institutions to prevent FTX’s BlockFi rescue through a majority acquisition company.

CoinDesk confirmed that the head of Morgan Creek Digital, Mark Yusko, has repeatedly called stakeholders and interests in BlockFi over the past few days to warn about the FTX deal.

Morgan Creek Digital, which has participated in BlockFi funding rounds in the past, will certainly be affected and therefore has decided to act. Mr. Yusko also compared Mr. Sam Bankman-Fried’s actions at this time to that of financial tycoon J.P. Morgan during the American financial crisis of 1907, when it spent a large amount of money to prevent the chain effect from spreading throughout the banks.

The head of Morgan Creek Digital revealed that the only reason for BlockFi to accept the offer from FTX is that besides being willing to provide a large amount of cash of $250 million, FTX also does not need BlockFi to take user assets to secure the loan.

Founder of Morgan Creek Capital Management, Mark Yusko

In other words, in the event of bankruptcy, BlockFi can still return some assets to users in advance, instead of paying their creditors and then to users like other offers.

In order to prevent the risk that BlockFi decided to shake hands with FTX, Mr. Yusko said:

“The only alternative is to raise an equivalent amount in equity and that’s what we’re working on. I would say it’s a 10% possibility but not zero.”

In addition, on June 25, the Wall Street Journal also cited an insider who confirmed that FTX is intending to buy back shares in BlockFi, making Yusko’s disclosures more credible and has become a hot topic of discussion in the crypto community this morning.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join CoinCu Telegram to keep track of news: https://t.me/coincunews

Follow CoinCu Youtube Channel | Follow CoinCu Facebook page

Harold

CoinCu News

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.

Recent Posts

Best Cryptos to Invest in December 2024: Qubetics Surges Past $2.6M as Solana Records Big Whale Pump and Polkadot Aims for $6

Best Cryptos to Invest in December 2024: Qubetics surges past $2.6M, Solana’s whale pump ignites…

6 minutes ago

Bitcoin Trader Turned $100M in His 20s—Now Reveals 5 Altcoins to Build a $50M Portfolio, With Memecoins Leading the Way!

As Bitcoin reaches unprecedented heights and the market surges, he's highlighting five altcoins poised for…

2 hours ago

Which Crypto Will Explode in the 2024-2025 Bull Run?

With the crypto market reaching new peaks, many are eager to discover digital currencies poised…

2 hours ago

Dogecoin and Shiba Inu Approach $1, but All Eyes Are on XYZVerse’s Push to $10!

XYZVerse, blending sports passion with meme energy, is set to make a significant impact, uniting…

2 hours ago

Will Bitcoin Crash or Soar Past $105K in 2024?

Will Bitcoin Crash?" seems to be one of the most controversial questions, as the price…

3 hours ago

The Best Crypto for Passive Income? 10% Weekly Gains and 20% Final Surge—Qubetics Mirrors Cosmos’ Early Success!

There’s always that one coin people wish they hadn’t overlooked. For many, Cosmos ($ATOM) is…

4 hours ago

This website uses cookies.