FTX Paid 94% Of Its $84M Blockfolio Deal In 2020 With FTT

Lavina Daryanani
Source: India TV News

With every passing day, new revelations with respect to FTX and its past are being made. A few hours back, Bloomberg reported that the bankrupt crypto exchange used its native token FTT to pay for its Blockfolio takeover deal.

Citing financial statements obtained and documents reviewed, Bloomberg revealed,

“FTX paid roughly $84 million in 2020 to take a majority stake in Blockfolio, in what was then among the largest crypto acquisitions. About 94% was paid in FTT tokens, a cryptocurrency that FTX created.”

The report also chalked out that at the time the Blockfolio deal was announced, news outlets reported FTX financed it with a mix of cash, crypto, and equity, without giving further details. The agreement gave FTX a 52% equity stake in Blockfolio and valued the company at almost $160 million. The financial statements also showed that there was an option to buy the rest within two years.

Also Read: FTX’s Gary Wang & Alameda CEO Caroline Ellison Plead Guilty To Criminal Charges

SEC Gives FTT The ‘Security’ Tag

Earlier today it was reported that FTX’s Gary Wang and Alameda CEO Caroline Ellison pleaded guilty to criminal charges. In its complaint against the said executives, the SEC labeled FTX’s exchange token FTT as a security. The complaint noted,

“If demand for trading on the FTX platform increased, demand for the FTT token could increase, such that any price increase in FTT would benefit holders of FTT equally and in direct proportion to their FTT holdings.”

It also added that the large allocation of tokens to FTX “incentivized” the management team to take steps to attract more users. It also alleged that doing so helped them increase the demand and price of FTT.

The complaint further underlined that FTX used proceeds from the FTT token sale to fund its business efforts. It also stressed that the exchange token was an “investment” in its terminology.

SBF, Caroline Ellison Were Surprised That Bitcoin Didn’t Crash Much

Another complaint filed by the CFTC on Wednesday revealed the messages shared between insiders. On the evening of November 6, as executives monitored and reacted to the movements in FTT prices and the ripple effects on the crypto market, an unnamed Alameda executive said,

“I’m surprised BTC isn’t down more.”

Former Alameda Research CEO Caroline Ellison responded, “me too.” Bankman-Fried went on to add, “yea me 3.”