FTX signs deal with option to buy BlockFi for up to $240 million

(Reuters) – Sam Bankman-Fried’s FTX crypto trade has signed a cope with an choice to purchase embattled crypto lender BlockFi for as much as $240 million, BlockFi Chief Government Zac Prince stated on Friday.

FTX has additionally agreed to offer BlockFi with a $400 million revolving credit score facility, Prince stated in a tweet. He added that BlockFi has confronted a bounce in withdrawals after information of crypto lending platform Celsius Community’s freeze.

Fears of a doable U.S. recession because of aggressive fee hikes from the Federal Reserve have roiled dangerous property this 12 months, together with cryptocurrencies. That has sparked a meltdown in what was simply final 12 months a booming business.

Final month, BlockFi reduce 20% of its headcount and applied a number of cost-cutting measures comparable to decreasing advertising and marketing spending and govt compensation.

Corporations use revolving credit score amenities as backstop financing to fight opposed impacts on different sources of revenue. For essentially the most half, these amenities stay undrawn.

(Reporting by Niket Nishant in Bengaluru; Enhancing by Aditya Soni)