Nexo Offered to Acquire BlockFi For $850M in July

Following the implosion of FTX which acquired the United States cryptocurrency lending platform BlockFi, new information has resurfaced concerning the crypto lender.

Switzerland-based digital asset lender Nexo had attempted to acquire BlockFi by offering $850 million in July before it signed a non-final deal with the U.S arm of now-troubled crypto exchange FTX Derivatives Exchange. 

Nexo’s unsuccessful indicative investment proposal offer with BlockFi was made after the latter lost $80 million due to its exposure to bankrupt crypto hedge fund Three Arrows Capital (3AC). The deal included the acquisition of a 51% stake in BlockFi worth $30 million as well as a $500 million credit line. Instead, BlockFi turned down Nexo’s preposition to sign a tentative agreement with FTX U.S.

Today, FTX Derivatives Exchange has filed for Chapter 11 bankruptcy together with its associate Alameda Research which had a huge percentage of the FTX token (FTT). Remarkably, Nexo’s offer was more mouth-watering than that of FTX at that time. FTX U.S allegedly acquired BlockFi for as low as $15 million which was likely to go higher based on performance.

BlockFi Picks FTX U.S Over Nexo

Nexo executives were perplexed with BlockFi’s choice seeing that FTX’s offer was far below their proposal. They concluded that maybe it was an issue of conflict of interest rather than the value of the acquisition. Antoni Trenchev, Nexo Co-founder confirmed the news of the company’s proposal to BlockFi.

“I can confirm that we offered BlockFi a deal in the summer. It was a better alternative to the FTX proposal, but BlockFi’s management chose to go with FTX. Since it did not make economic sense for them to go with a worse deal, we were perplexed and there were speculations about conflicts of interest,” Trenchev said.

With the eventualities of FTX, Trenchev opined that BlockFi would have made a better choice by picking Nexo’s offer instead.

So far, BlockFi has had to suspend withdrawal on its platform in connection to the liquidity crunch faced by FTX. The crypto lender tied its decision to the lack of clarity surrounding the current bankruptcy status of FTX. Also, users of the platform have been asked not to add funds to their BlockFi wallets or interest accounts.