Cryptocurrency exchange FTX is in talks to acquire a stake in crypto lender BlockFi after giving it a $250 million credit line this week, people familiar with the situation told The Wall Street Journal Friday (June 24).
The news comes on the heels of Alameda Research, the other company owned by crypto billionaire Sam Bankman-Fried, acquiring a large ownership stake in Canadian crypto broker Voyager Digital Ltd., the report said, noting Alameda extended a pair of credit lines — one for $200 million in cash and stablecoins and another for 15,000 bitcoins — to Voyager.
BlockFi and FTX are still in active discussions and there has been no equity agreement between the parties, the people told WSJ.
The crypto market has lost about $2 trillion in value since its high-water mark in November, including the collapse of the stablecoin Terra USD in early May, wiping out about $40 billion worth of crypto assets. Celsius Network, Three Arrows Capital and other crypto exchanges have battled liquidity issues.
Voyager lowered the withdrawal limit for its customers to $10,000 over a 24-hour period this week, down from $25,000, according to an update to its website.
Alameda acquired a $35 million stake in Voyager last month, paying $2.34 a share to acquire 14.96 million shares, giving Bankman-Fried an 11.56% ownership stake in the company, before it surrendered 4.5 million.
On May 31, the CEOs of cross-border payments firm Ripple and crypto exchange FTX.US told CNBC they were on the lookout for juicy acquisition targets, with Ripple’s Brad Garlinghouse predicting “an uptick in M&A in the blockchain and crypto space” and saying that with a “very strong balance sheet,” it would be looking for bargains. FTX.US’s Brett Harrison said the company was looking to grow users and licenses.
Bankman-Fried — considered the wealthiest of crypto’s remaining billionaires — said he feels “a responsibility to seriously consider stepping in, even if it is at a loss to ourselves,” to protect the ecosystem and “help it grow and thrive,” but it’s not an entirely altruistic impulse.
Last August, FTX bailed out Japanese exchange Liquid Group to the tune of $120 million after it was hacked of $100 million. In February, FTX acquired the company outright on undisclosed terms — gaining customers and licenses in Asia.
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