FTX Could Soon Purchase Stake in BlockFi

FTX Could Soon Purchase Stake in BlockFi

Key Takeaways

• According to today's Wall Street Journal reporting, crypto exchange FTX is in discussions to buy a stake in BlockFi.


• BlockFi obtained a $250 million line of credit from FTX earlier this week, implying that the company is in need of capital.


• Other investments and acquisitions have been undertaken by FTX and linked entities in recent months.

FTX Is Talking With BlockFi

According to reports, FTX and BlockFi are discussing the possibility of the former purchasing a stake in the latter.

According to sources, talks between the two companies are still ongoing. There has been no final decision, and the amount of money under consideration has not been disclosed.

FTX provided BlockFi with a $250 million line of credit earlier this week. BlockFi CEO Zac Prince stated that the loan would help the company's balance sheet and platform strength.

Despite Prince's optimistic spin on the transaction, BlockFi's move to seek a loan appears to indicate financial difficulties. In addition, the business liquidated its stake in Three Arrows Capital (3AC) and laid off 20% of its employees this month.

These incidents have all contributed to speculations of limited liquidity at BlockFi. As a result, FTX's potential decision to buy a share in BlockFi might offer much-needed capital.

FTX Is Investing in Other Companies

Sam Bankman-Fried, the founder and CEO of FTX, has invested in several other cryptocurrency startups.

Bankman-Alameda Fried's Research has bought a stake in the Canadian crypto brokerage Voyager Digital.

This month, Alameda also issued a credit line of $200 million in cash and 15,000 BTC to Voyager. That money appears to be meant to assist Voyager in recovering from a failed agreement with Three Arrows Capital (3AC), to whom it lent that sum. 3AC owes Voyager $667 million, according to Voyager.

In other transactions this year, Bankman-Fried acquired a 7.6 percent share in Robinhood for $648.3 million. This month, FTX purchased Bitvo, while FTX.US acquired Embed Financial.

FTX looks to be in a good place. With $2 billion in trade activity over the last 24 hours, CoinGecko rates FTX as the second-largest completely trustworthy exchange.