After numerous days of conflicting reports leaving BlockFi investors and crypto watchers on edge, company CEO Zac Prince took to Twitter on Friday to announce that FTX signed a deal to bail out the embattled crypto firm.
The Numbers: BlockFi signed a definitive agreement with the Sam Bankman-Fried led crypto behemoth, FTX, that broadens the initial scope of the term sheet that was agreed to last week.
Under the terms of the new deal, FTX will provide a $400-million revolving credit facility, up from the previously agreed $250 million, as well as leaving FTX with the option of purchasing BlockFi at a variable price of up to $240 million — nearly 10 times more than what was reported on Thursday.
The Background: “Crypto market volatility, particularly market events related to Celsius and 3AC, had a negative impact on BlockFi. The Celsius news on June 12th started an uptick in client withdrawals from BlockFi’s platform despite us having no exposure to them,” Price said on Twitter, explaining the events that led to the deal with FTX.
He noted that the buyout deal will rely on BlockFi performance triggers, saying, “This, together with other potential consideration, represents a total value of up to $680M.”
The potential price tag of $240 million is far from the $3-billion valuation BlockFi received in a $350-million funding round last March.
Prince said the deal is the best path forward for company stakeholders and the crypto ecosystem as a whole.
Photo courtesy of BlockFi.