Crypto exchange FTX in discussion to acquire stake in BlockFi

Cryptocurrency exchange FTX is in talks to acquire a stake in crypto lender BlockFi, the Wall Street Journal reported, citing people familiar with the matter.

The companies had previously announced on Tuesday that BlockFi had signed a term sheet with FTX for a $250 million revolving credit facility, which will give BlockFi crucial access to capital amid a rout in the digital currency market.

No equity agreement has yet been reached, and discussions are ongoing, according to the Wall Street Journal.

In a statement, a BlockFi spokesperson said the company “does not comment on market rumors.”

“We are still negotiating the terms of the deal and cannot share more information at this time. We anticipate sharing more on the terms of the deal with the public at a later date,” the BlockFi spokesperson said.

A spokesperson for FTX declined to comment.

Last week, BlockFi said it was reducing its headcount by about 20 per cent, in addition to implementing other cost-cutting measures like reducing marketing spending and executive compensation.

Aggressive rate hikes by the US Federal Reserve and recession fears have led to a turmoil in equities and sparked a sell-off in cryptocurrencies. Last weekend, the world’s biggest cryptocurrency, bitcoin, dropped below the key $20,000 level for the first time since December 2020.