FTX seeks to add BlockFi stake to its portfolio

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Cryptocurrency exchange FTX is in talks to acquire a stake in crypto lender BlockFi after granting it a $250 million line of credit this week, people familiar with the matter told The Wall Street Journal on 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 stake in Canadian crypto broker Voyager Digital Ltd., according to the report, noting that Alameda has extended a pair of lines of credit – 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 fairness agreement between the parties, the people told the WSJ.

The crypto market has lost around $2 trillion in value since its peak in November, including the collapse of the Terra USD stablecoin in early May, wiping out around $40 billion in crypto assets. Celsius Network, Three Arrows Capital and other crypto exchanges have struggled with liquidity issues.

Voyager lowered the withdrawal limit for its customers to $10,000 in a 24-hour period this week from $25,000 previously, according to an update to its website.

Alameda acquired a $35 million stake in Voyager last month, paying $2.34 per share to acquire 14.96 million shares, giving Bankman-Fried an 11.56% stake in the company, before to sell 4.5 million.

Related: Well-Funded Crypto Survivors Smell the Blood in the Water

On May 31, the CEOs of cross-border payments company Ripple and crypto exchange FTX.US told CNBC they were looking for juicy acquisition targets, with Ripple’s Brad Garlinghouse predicting “a slight increase mergers and acquisitions in the blockchain and crypto space” and saying that with a “very strong balance sheet”, he would be looking for good deals. Brett Harrison of FTX.US said the company is looking to increase the number of users and licenses.

Bankman-Fried – considered the wealthiest of the remaining crypto billionaires – said he felt “a responsibility to seriously consider stepping in, even if it’s at a loss to ourselves”, to protect the ecosystem and “help it grow and prosper”, but that’s not an entirely altruistic impulse.

Last August, FTX bailed out Japanese exchange Liquid Group to the tune of $120 million after being hacked out of $100 million. In February, FTX acquired the company on undisclosed terms, gaining customers and licenses in Asia.

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