Despite the doom and gloom, BlockFi has some serious suitors. Namely, FTX and Morgan Creek.
- FTX, Morgan Creek Looking To Buy BlockFi
- Morgan Creek Looking To Save Their Investment
- How’s BlockFi Doing?
FTX, Morgan Creek Looking To Buy BlockFi
Today @BlockFi signed a term sheet with @FTX_Official to secure a $250M revolving credit facility providing us with access to capital that further bolsters our balance sheet and platform strength.
— Zac Prince (@BlockFiZac) June 21, 2022
Crypto lender BlockFi appears to be in a strong position considering all its suitors. Both FTX and MorganCreek are looking to buy the crypto savings and lender, despite the fact that BlockFi reportedly had exposure to 3AC — it liquidated the crypto investment firm.
FTX, for one, originally extended a credit line to BlockFi after the liquidation. The move, Zac Prince (CEO of BlockFi) said at the time, “bolsters our balance sheet and platform strength.”
Shortly after, FTX reportedly offered to buy a stake in BlockFi. A BlockFi spokesperson tried to keep mum on the offer by stating “BlockFi does not comment on market rumors,” however, the second part gave it all the way, “We are still negotiating the terms of the deal and cannot share more information at this time. We anticipate sharing more on the terms of the deal with the public at a later date.”
Despite not commenting on market rumors, it sure seemed to acknowledge the existence of a deal considering it spoke of the “terms of a deal.” Sure doesn’t all that exploratory of an offer. However, investors in BlockFi took umbrage with the “terms of the deal.”
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Morgan Creek Looking To Save Their Investment
Morgan Creek, inspired by a provision of the deal that allowed FTX to buy BlockFi “at essentially zero price,” began working on putting together an offer to acquire the platform. Morgan Creek is a digital investment firm that participated in several founding rounds of the crypto savings and lender.
The offer, not yet formalized, would consist of investors pooling money together to best FTX’s competing offer. “The only alternative is to raise an equivalent amount in equity and that’s what we’re working on,” said Mark Yusko of Morgan Creek. “I would say it’s a 10% possibility but not zero.”
If unsuccessful, BlockFi shareholders, including Morgan Creek, could stand to lose all of their investments in the crypto savings and lender.
How’s BlockFi Doing?
Interestingly enough, BlockFi appears to be already operating as if it’s in a healthy position, despite the current market woes.
After announcing layoffs, and the liquidation of a large shareholder, BlockFi announced Friday that it’s increasing rates on several of its cryptocurrency offerings. BlockFi had notoriously lower rates than other crypto savings and lenders during the bull run.
It’s a curious move considering what’s going on, especially with companies of their ilk like Celsius struggling to stay open. It’s the sort of move you make if you are confident about the near future.
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