FTX US has agreed to purchase BlockFi, a cryptocurrency lender. for up to $240 million

FTX US has agreed to purchase BlockFi, a cryptocurrency lender. for up to $240 million ...

FTX US, a subsidiary of FTX, has signed an agreement that allows it to purchase BlockFi, a cryptocurrency exchange that has been established for over $240 million (roughly Rs. 1,895 crore). BlockFi, in turn, is a startup that allows users to buy, sell, and trade digital assets, as well as access cryptocurrency-backed loans, according to reports earlier this week.

BlockFi received a $250 million (roughly Rs. 1,974 crore) emergency line of credit from FTX. The company stated that the credit line is intended to assist the startup in maneuvering the market from a position of strength.

Yesterday, we signed definitive agreements, subject to shareholder approval, with FTX US for:

2. A $400 million revolving credit facility that is subordinate to all client funds, and3. An option to purchase BlockFi at a variable price of up to $240 million based on performance triggers.

If FTX US purchases BlockFi, the transaction would be worth up to $240 million (roughly Rs. 1,895 crore). FTX US has agreed to provide the startup with a $400 million (roughly Rs. 3,157 crore) revolving credit facility.

In a series of tweets, BlockFi CEO Zac Prince provided more information on the factors that led to this week's partnership with FTX.

Prince stated that cryptocurrency market volatility, particularly market events related to Celsius and 3AC, had a negative impact on BlockFi. Celsius Network LLC is a cryptocurrency loan company that last month froze withdrawals and transfers, while 3AC or Three Arrows Capital is a crypto hedge fund.

Prince reported an increase in client withdrawals from the BlockFis platform on 12 June, despite us being unaware of them. In the same week, the 3AC news sparked further concern in the market. Although we were one of the first to fully accelerate our over-collateralized loan to 3AC, we did suffer $80 million in losses.

Prince said that BlockFi has not used the $400 million (roughly Rs. 3,157 crore) revolving credit facility provided by the cryptocurrency exchange operator. All BlockFi products and services will continue to operate as they are.

Prince explained that the FTX US platform and services are highly complementary to BlockFi and that we anticipate enhancements to our services as a result of increased collaboration.

The information provided in the article is not intended to be nor does it constitute financial advice, trading advice, or any other kind of recommendation or advice offered or endorsed by NDTV. NDTV shall not be held responsible for any loss arising from any perceived recommendation, forecast, or other information contained in the article.

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