BlockFi’s boss denied a report Thursday that FTX was close to buying his embattled cryptocurrency lender for just $25 million during ongoing “crypto winter” conditions and plunging bitcoin prices that have rattled investors.
BlockFi CEO Zac Prince spoke out shortly after a report said that crypto billionaire Sam Bankman-Fried’s FTX was days away from buying the struggling firm at a major discount.
The rumored $25 million is a 99% discount from BlockFi’s most recent private valuation of $4.8 billion.
“Lots of market rumors out there – I can 100% confirm that we aren’t being sold for $25M. I encourage everyone to trust only details that you hear directly from @BlockFi,” Prince said. “We will share more w you as soon as we can.”
The Post also reached out to FTX for comment.
CNBC reported that FTX is close to buying BlockFi for $25 million in a deal that was “expected to be signed by the end of the week.” One source noted the final price tag could shift by Friday.
Another source told the outlet that BlockFi’s equity investors are “wiped out” as the lender struggles to survive a downward spiral in cryptocurrency prices.
Prince’s tweet did not explicitly rule out the possibility of a sale for BlockFi, which reached an agreement with FTX on a $250 million emergency line of credit just last week. BlockFi representatives declined to provide further comment on a potential sale.
“BlockFi’s team has always demonstrated a strong bias towards prudent risk management and swift action. Protecting customer assets is their top priority which allows them to operate from a position of strength. FTX is excited to partner with BlockFi, a leader in the digital asset ecosystem, to offer first-class products to customers,” Bankman-Fried said in a statement on the $250 million credit line.
Bitcoin’s value briefly dipped below $19,000 on Thursday as investors braced for the possibility of a recession and reacted to mounting fears of a liquidity crisis hitting major operators within the sector. Cryptocurrency hedge fund Three Arrows was ordered to liquidate this week after facing legal challenges from creditors over unpaid debts.
Earlier this month, BlockFi – whose backers include tech billionaire Peter Thiel – revealed that it would cut staff by 20% during what Prince described as a “dramatic shift in macroeconomic conditions.”
“We are steadfast in our commitment to ensure BlockFi is here for the long haul,” Prince said at the time. “Our clients will not experience any material changes to the quality of service they have come to expect, their funds are safeguarded, and all platforms and products continue to operate normally.”
Days later, The Post reported that BlockFi was struggling to raise cash to help keep its operations afloat even after offering to take a steep discount on its valuation.