Crypto Exchange FTX – founded by billionaire Sam Bankman-Fried – is reportedly in talks to acquire a stake in troubled crypto lending platform BlockFi.
According to a report published yesterday by Wall Street Journal, Bankman-Fried has entered negotiations, but an equity agreement is yet to be reached. The news follows BlockFi securing a $250 million credit line from FTX earlier this week, which was largely dubbed a “bailout.”
The line of credit might eventually become a part of the deal. Earlier, BlockFi CEO Zac Prince had said that the credit line was a strategic decision, parts offensive and defensive while justifying the company’s obligations towards its customers.
Zac Prince had said:
“We felt that it was a smart, offensive and strategic decision for BlockFi to bolster the balance sheet with a big number, and tell everybody about it.”
FTX CEO Bankman-Fried’s management has stepped forward to support several beleaguered crypto projects during the “crypto winter.” On Wednesday, Alameda Research, a trading firm controlled by Bankman-Fried, announced a loan of 15,000 BTC to Voyager Digital – the New-York based digital assets lending and yielding company facing losses due to its exposure to Three Arrows Capital.
Although Bankman-Fried has been silent about this deal, he expressed his concern over VC firms’ reluctance to help crypto startups facing challenges amid the market downturn. Bankman-Fried feels he and his companies “have a responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion.”
Some other recent investments of Bankman-Fried’s companies include a 7.6% equity in stock trading platform Robinhood for $648 million, Canadian crypto exchange Bitvo, and brokerage-services firm Embed Financial Technologies.