Earlier this year, BlockFi signed a contract with FTX.
Why Does the Company Talk To Our Clients and Other Shareholders
In the wake of FTX’s collapse, crypto lender BlockFi said it could not do business as usual and would be cutting back on what it does.
The company said, “We will give more details as soon as possible.” “…we plan to talk to our clients and other shareholders as often as possible, but we think it will be less often than they are used to.”
BlockFi and FTX US announced in July that they had reached an agreement wherein FTX US would provide BlockFi with a $400 million credit facility, and the crypto exchange would have the option to buy BlockFi. The acquisition’s price would depend on various conditions.
These stipulations included BlockFi getting approval from the U.S. Securities and Exchange Commission (SEC) to run a yield-generating service in the U.S., attaining $10 billion in client assets by the time FTX US exercised its option, and BlockFi’s yearly revenue.
If these conditions were met, FTX US would be required to invest as much as $240 million to purchase the lender. BlockFi might have been sold for as little as $15 million if the terms still needed to be met.
Is BlockFi an “Independent business entity”?
In her Tuesday Twitter thread, Marquez appeared to be referring to this deal, stating that BlockFi was an “independent business entity” and noting that the lender’s deal was with FTX US, not FTX international.
The fact that FTX, the international business connected to FTX US, has a $10 billion hole in its books has cast doubt on this deal.
FTX has stopped accepting withdrawals and is currently the focus of state and federal investigations. Sam Bankman-Fried, the founder of FTX, claims that FTX US is OK, but the business said on Thursday that it might stop trading soon and recommended consumers stop making deposits.