• FTX had earlier floated a $250 million line of credit to BlockFi in a bid to stabilize its bleeding cash flows
  • The crypto lender has been one of a number of recent operators caught off guard by slumping crypto markets

Cryptocurrency exchange FTX has accelerated its shopping spree with a soon-to-be finalized purchase of beleaguered digital assets lender BlockFi, according to three sources familiar with the matter. 

The move comes after FTX founder Sam Bankman-Fried lined up a $250 million emergency cash infusion for BlockFi, which — like scores of competitors — has found itself deeply underwater given the market turbulence surrounding Celsius and Three Arrows Capital. 

BlockFi was a large lender to Three Arrows, which is currently undergoing a court-mandated restructuring.

“Three Arrows really created this contagion,” one source said. 

The move was accelerated by rival cryptoasset managers mounting competing bids for BlockFi — as those operators attempted to stop FTX from using debt-to-equity convertible notes, which would have diluted their own stakes in the company. 

The acquisition, for BlockFi, would likely involve additional layoffs, sources said, adding Bankman-Fried is predominantly interested in profiting from the company’s technology, investors and counterparties. A spokesperson for BlockFi told Blockworks the company “does not comment on market rumors” and denied the prospect of staff cuts, citing a statement from the firm’s chief executive. 

Earlier reports, citing a leaked investment call from BlockFi backer Morgan Creek Capital, said the deal would trigger a large number of layoffs.

CNBC first reported the deal, referencing anonymous sources to peg the price tag at approximately $25 million — an astonishing 99% decrease from its earlier valuation. The Block earlier reported the likelihood of the purchase for the same amount. 

Sources for Blockworks requested anonymity to discuss sensitive business dealings. A spokesperson for FTX did not immediately have a comment.


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  • Managing Editor
    Michael Bodley is a New York-based managing editor for Blockworks, where he focuses on the intersection of Wall Street and digital assets. He previously worked for the institutional investor newsletter Hedge Fund Alert. His work has been published in The Boston Globe, NBC News, The San Francisco Chronicle and The Washington Post. Contact Michael via email at [email protected]