Crypto exchange FTX is reportedly to acquire a stake in beleaguered crypto lender BlockFi, The Wall Street Journal reported Friday.
FTX to Acquire a Stake in BlockFi
Crypto firms have suffered due to a massive price slide, which has erased $2 trillion in value since November's high. Furthermore, the stablecoin Terra USD collapse earlier this month wiped out about $40 billion worth of crypto assets.
Currently, crypto billionaire Sam Bankman-Fried has become the last resort for the beleaguered crypto industry. In fact, he might as well end up owning large chunks of it.
FTX, the crypto exchange led by Bankman-Fried, has entered negotiations with BlockFi to acquire a stake in the firm. Furthermore, the news comes just after the crypto exchange issued a $250 million credit line to the lending firm, which the crypto industry largely viewed as a "bailout."
At the time, BlockFi CEO Zac Prince tweeted, "This agreement also unlocks future collaboration and innovation between BlockFi & FTX as we work to accelerate prosperity worldwide through crypto financial services,"
However, no equity agreement has been reached yet. BlockFi stated, "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."
Sam Bankman-Fried - Crypto Industry's Last Resort?
Meanwhile, the FTX founder has supported several crypto projects in recent weeks amid the current bear market. His trading form Alameda Research announced loaning 15,000 Bitcoin to Voyager Digital to cover losses from 3AC exposure.
Before the BlockFi deal was announced, Bankman-Fried 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."
Some of his other recent investments include a 7.6% stake in Robinhood Markets for $648 million. The investment made him the trading app's third-largest shareholder.
It's still unclear if FTX's intent to purchase a stake in BlockFi is related to the firm's current financial difficulties. In February, the crypto lender was slapped with a $100 million fine by the United States SEC, citing unregistered securities.