Acquisition discussions between BlockFi and FTX might be coming to a close.
Unidentified sources informed CNBC on Thursday that the struggling crypto lender could be purchased by CEO Sam Bankman-FTX Fried’s bitcoin exchange for roughly $25 million.
Zac Prince, the CEO of BlockFi, moved to Twitter to refute the reports:
“Lots of market rumors out there. I can 100% confirm that we aren’t being sold for $25M.”
If a transaction were to come close to that, FTX would only be paying peanuts for the troubled bitcoin lending business. When New Jersey-based BlockFi raised its $350 million Series D round in March of last year, it was valued at $3 billion.
Since then, the company has settled with state regulators and the US SEC for $100 million regarding its BlockFi Interest Accounts, and it is now rumored to be holding a significant amount of toxic debt as a result of the fallout from the liquidation of hedge fund Three Arrows Capital.
If FTX does end up purchasing BlockFi, it won’t be the first time that term sheet negotiations were opened with a promise of assistance. Similar maneuvers were made by the exchange with the Japanese fintech firm Liquid Group, and in April a deal to acquire the business for an unknown sum was finally finalized.
After the company had $90 million stolen in a breach, FTX granted it a loan of $120 million and then declared that it was in talks to buy the business in February of this year.