Sam Bankman-Fried’s FTX is expected to finalize the BlockFi acquisition deal for $25 million this week. The news comes from CNBC, which obtained information from anonymous sources. According to CNBC, the term sheet for the deal is almost over and the deal is likely to be finalized this week.
The sources were not willing to reveal themselves as the deal is currently confidential. The deal will reportedly be done for $25 million. The deal price is 99% below its previous valuation. The previous valuation of BlockFi was $4.8 billion. The deal literally went from billions to millions. A source indicated that such an acquisition may take many months to complete and that the price could change between now and Friday.
FTX acquisition rumors were out
The rumors about FTX trying to strike a deal with BlockFi were published by The Block. The Wall Street Journal also initially reported the exchange’s plans to acquire a stake in BlockFi. Spokespersons from FTX and BlockFi were not willing to speak out on the matter.
BlockFi announced on June 13 that it is planning to cut down its staff by 20%, citing harsh market conditions. The team stated that the change in economic conditions had a negative impact on them, which enticed them to make the decision. The firm also said that the market circumstances have been negative since Q1 of 2022, resulting in a severe drop in equities and crypto markets.
The news of the deal comes after FTX provided BlockFi with a revolving credit of $250 million to provide aid to the firm to survive the storm and provide stability.
The bear market is proving to be extremely difficult for crypto firms as they are struggling to keep up. Plunging crypto prices followed by liquidity issues are luring several firms to fail in meeting margin calls. FTX CEO seems to be lending a helping hand to different firms amidst the market turmoil.