FTX US to reportedly acquire BlockFi for as low as $15M

August 23, 2022

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According to a recent report, the acquisition agreement between BlockFi and FTX.US has a baseline price of $15 million that could go up based on performance.

Leading cryptocurrency exchange FTX.US has reportedly been in talks to acquire the crypto lender for as little as $15 million, as opposed to the previously estimated $240 million price tag.

Performance-based acquisition of BlockFi

BlockFi CEO Zac Prince tweeted that the $240 million amount was subject to “performance triggers” after the acquisition agreement was announced. One of these triggers, according to a recent article, is the company receiving regulatory approval from the Securities and Exchange Commission by December 31 for its yield product, BlockFi Yield, which would release $25 million from FTX.US.

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Moreover, FTX.US would pay an extra $100 million if BlockFi’s client assets reached $10 billion by October 2023. Last but not least, according to reports, FTX.US has agreed to pay up to $100 million, or 25% of BlockFi’s yearly operational profits.

BlockFi may be bought by FTX.US for a floor price of $15 million if it fails to satisfy any of these conditions. However, it would still be able to purchase FTX.US’s acquisition option prior to October 2023 for “two to three times” the money the exchange initially contributed to the transaction.

BlockFi is a cryptocurrency lending platform, which refers to a business that offers its clients the chance to profit from the returns offered by decentralized finance (DeFi) protocols. The company, which was valued at $4.8 billion in July 2021, was severely affected by a liquidity issue together with Celsius, Voyager, Babel Finance, and CoinFLEX as a result of this year’s brutal collapse of the cryptocurrency market.

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Notably, BlockFi signed a definite agreement with FTX US in July with the aim of obtaining a $400 million credit facility, as TheCoinRise reported.

FTX, which was reportedly discussing acquiring Robinhood, hinted in July that it has a “few billion” in hand to support struggling firms to maintain the stability of the crypto market.