A recent report claims that the $15 million base price of the purchase deal between BlockFi and FTX.US might increase depending on performance.
According to reports, leading cryptocurrency exchange FTX.US has been in discussions to buy BlockFi for as low as $15 million, less than the previously projected $240 million price tag.
Performance-based BlockFi acquisition
Following the announcement of the purchase deal, BlockFi CEO Zac Prince tweeted that the $240 million price was subject to “performance triggers.”
Obtaining regulatory permission from the Securities and Exchange Commission by December 31 for the company’s yield product, BlockFi Yield, which would release $25 million from FTX.US, is one of these triggers, according to a recent story.
A further $100 million payment from FTX.US would be made if BlockFi’s customer assets reached $10 billion by October 2023.
FTX.US has agreed to pay up to $100 million, or 25% of BlockFi’s annual operating revenues, according to sources.
If BlockFi fails to meet any of these requirements, FTX.US may purchase it for a floor price of $15 million.
But it would still be able to pay “two to three times” as much as the exchange originally put into the deal to buy FTX.US’s acquisition option before October 2023.
BlockFi is a term used to describe a company that provides its customers with the opportunity to benefit from the returns provided by decentralized finance (DeFi) protocols.
The business, which was valued at $4.8 billion in July 2021, together with Celsius, Voyager, Babel Finance, and CoinFLEX, was badly impacted by a liquidity crisis as a consequence of this year’s devastating fall in the cryptocurrency market.
Notably, BlockFi and FTX US inked a binding contract in July with the intention of securing a $400 million credit line.
FTX revealed in July that it had a “few billion” on hand to help faltering enterprises in order to protect the stability of the cryptocurrency sector. FTX was allegedly in talks to acquire Robinhood.