Could FTX be purchasing BlockFi for only $15M?

The purchase depends on the goals hit by the crypto lender.

FTX and Sam Bankman-Fried are saving a lot of companies in turmoil. There are some that have reported that the crypto crash seems like 1907’s panic and the FTX CEO is taking the role of J.P Morgan. During that time J.Pierpoint Morgan was seen as a god-like being. Where those names and others associated with them such as Rockefeller the history of America and American banking would change forever. At this point in time it seems as if history is about to repeat itself in some form and the name of the future will be Bankman-Fried.

Having deep pockets is of course helpful and Sam Bankman Fried has been seen as a very altruistic CEO within the crypto community. Many companies have benefited from the generosity of the FTX leader, one such company would be BlockFi, which was the beneficiary of a $400 million credit line from the U.S arm of FTX. FTX also received an option to purchase BlockFi outright for $240 million.

According to sources known by CoinDesk the numbers have been made clearer and what lies on the table can be better explained. The situation isn’t as simple as Mr. Bankman-Fried being generous, instead there are plans and hopes for his company to acquire BlockFi. 

There is indeed a chance the purchase of the company will only cost FTX $15 million. This has been stated as the minimum price of the deal. This is $10 million lower than a previous price that was rebutted in a tweet by BlockFi CEO Zac Prince. All elements of the purchase come with certain stipulations. 

If BlockFi were able to win an important regulatory clearance from the U.S SEC ( Securities and Exchange Commission) for BlockFi Yield by December 31. Achieving this milestone wold mean there would then be an additional $25 million up for grabs. BlockFi Yield is a product of BlockFi that generates interest on depositors crypto by lending the crypto out at a higher rate.

Another $100 million would be available if BlockFi were to reach $10 billion in assets by the time FTX plans to buy the company, currently BlockFi has only been able to manage less than half of that amount at $4.4 billion.

A final maximum amount of $100 million was agreed upon as an amount equal to 25% of BlockFi’s annual operating income. The company has since lost money from 2020-2022.

These financials of course have not been confirmed by the company or by a spokesperson of the company. BlockFi has been given an option to buy back the company but at a price three times that of what FTX will pay. 

The deal will not be available to close until October 2023.

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