FTX is a cryptocurrency exchange. It’s coming close to buying a digital asset. These are the assets that are remaining of the lender Blocking. This purchase would be for around $25 Million. Sources revealed that the equity investors of BlockFi had been wiped out. Presently, they have decided to write their positions off at what can be seen as a loss. It could also take multiple months for the deal from FTX to finally close.
In just June of last year, BlockFi had a valuation that was of around $5 billion. The CEO of BlockFi, Zac Prince, has ended up denying such rumors.
Is BlockFi Being Sold Off?
Prince took to Twitter on the 30th of June in order to refute any speculation there was regarding the company being sold. Earlier in 2022 BlockFi had more than a million clients. Their assets and deposits were more than $10 billion. They had also distributed around $700 million in crypto interest as well as rewards.
The fortunes of BlockFi turned sour following them becoming a primary creditor of the Three Arrows Capital. This is a hedge fund that is currently going through problematic times. Due to this, BlockFi had to liquidate the positions of the Three Arrows Capital. This amounted to around $1.33 billion.
The Three Arrows Capital also posted a collateral for a loan of around $400 million. This was valued in GBTC shares. These tend to trade at either discounts of premium prices. When the liquidation happened the GBTC shares traded at around 34% discount. When BlockFi started to close their position, this figure further plunged.