A term sheet is currently being finalized between derivatives exchange FTX and digital assets platform BlockFi due to extreme market volatility and mismanagement within the company.
According to CNBC, an FTX spokesperson said the company “would not be commenting on the matter.” BlockFi was also unavailable to comment.
FTX had previously provided a $250 million emergency line of credit to BlockFi and will now be purchasing the company.
According to PitchBook, FTX plans to pay around $25 million for BlockFi but this valuation is 99% below the company’s previous valuation of $4.8 billion from the summer of 2021.
A tweet from @DrBitcoinMD summarizes the sentiment among Twitter participants who were following BlockFi’s developments.
A CNBC source mentioned that equity investors in BlockFi are “wiped out” and are now writing off the value of their losses. This person also stated that there are multiple offers for BlockFi at this time from other bidders.