Crypto exchange FTX is reportedly in talks to acquire a stake in BlockFi after the company issued a $250 million credit to the lending firm.
According to a Friday report from the Wall Street Journal, FTX is currently in discussions with BlockFi regarding the crypto exchange purchasing a stake in the firm, but no equity agreement has been reached. The reported ongoing talks followed BlockFi signing a term sheet with FTX to secure a $250 million revolving credit facility on Tuesday.
"BlockFi does not comment on market rumors," a BlockFi spokesperson told Cointelegraph. "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.
FTX founder and CEO Sam Bankman-Fried, or SBF, has helped support many crypto projects in recent weeks amid a bear market forcing a lot of companies to reduce staff. Trading firm Alameda Research, under SBF’s management, announced it had loaned 15,000 Bitcoin (BTC) to Voyager Digital on Wednesday aimed at covering losses from its exposure to Three Arrows Capital.
Cointelegraph reported on Sunday that SBF said he believes Alameda and FTX “have a responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion” around the market downturn:
“Even if we weren’t the ones who caused it, or weren’t involved in it. I think that’s what’s healthy for the ecosystem, and I want to do what can help it grow and thrive.”
VCs: "we'd love to help you backstop crypto firms and provide liquidity because we care deeply about preventing market contagion"— SBF (@SBF_FTX) June 23, 2022
also VCs: "can we please do it for the one great company (after you fix it) and make a lot of money doing it, you can take the others k thx bye"
It’s unclear if FTX’s reported intent to purchase a stake in BlockFi was related to financial difficulties at the crypto lending firm amid a bear market. However, in February the United States Securities and Exchange Commission ordered BlockFi to pay $50 million in settlement to the agency as well as $50 million to 32 state-level regulators over allegedly unregistered securities.
Cointelegraph reached out to FTX, but did not receive a response at the time of publication.