Cryptocurrency giant FTX.US has agreed to acquire embattled lender BlockFi for up to $240 million, according to Axios. The deal also includes a $400M revolving credit facility.
This is much higher than the rumored figure of $25 million that was reported by CNBC on Thursday.
Yet, it is worth mentioning that the $240 million deal is at the high end of the price range, which means that the final price of the acquisition could decline significantly. Its final price will depend on "performance triggers." Shareholders will have to approve the acquisition.
Still, this is a big comedown for the company that was seeking a $5 billion valuation last year.
In a Twitter thread, CEO Zac Prince says that crypto market volatility led to the deal with FTX.US. He cited the implosion of hedge fund Three Arrows Capital and competing lender Celsius as the two main catalysts behind his company's financial troubles.
He claims that it was important to bolster the company's balance sheet with additional funding in order to protect client funds.
Prince claims that he anticipates "enhancements" to the company's services through "increased collaboration," adding that he's "incredibly proud" of what that transaction has achieved.
The BlockFi CEO has stressed that all of the company's products continue operating normally, which is why it doesn't need the above-mentioned line of credit for now.