BlockFi Denies Being Bought By FTX For Only $25 Million
The controversy surrounding the rescue agreement between FTX and BlockFi continued when it was reported that FTX was preparing to acquire BlockFi for only $ 25 million.
FTX acquires BlockFi at a “low” price
On July 1, the US news site CNBC quoted a source confirming that the FTX cryptocurrency exchange is preparing to buy the BlockFi lending platform for only $ 25 million.
CNBC said the deal between the two sides would be finalized by the end of this week. The acquisition price will be $25 million – 99% lower than the company’s $4.8 billion valuations at its most recent funding round. However, the source said that the acquisition price would be able to fluctuate up to 50 million USD.
As revealed by Morgan Creek Digital, an investment fund that has participated in many BlockFi funding rounds, only FTX has accepted to rescue BlockFi with a commitment not to touch users’ money. As a result, the two reached an agreement that allowed BlockFi to borrow $250 million from FTX. Morgan Creek Digital claims the loan agreement has a hidden clause allowing FTX to buy back BlockFi at “nearly zero price”, forcing it to urgently call on other investors to prepare funds to compete with FTX.
Morgan Creek Digital also leaked insider information, such as the loan that BlockFi provided to Three Arrows Capital is up to $1 billion, the company’s valuation is only $500 million, and the company is about to cut another 80- 85% of personnel.
In a statement released on Twitter later, BlockFi CEO Zac Prince refuted the CNBC article.
“There are a lot of baseless rumors going around – I can confirm that the company was not sold for $25 million. People should only trust official information published by BlockFi.”BlockFi CEO Zac Prince said
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