Crypto Exchange FTX Prepares to Buy Stake in BlockFi -Newshubweek

Crypto Exchange FTX Prepares to Buy Stake in BlockFi
Written by Arindam

Despite the decline in the crypto market for the past few months, some firms belonging to this segment are trying to grow the business. Crypto exchange FTX is in talks to buy a stake in crypto lending firm BlockFi. Earlier this month, BlockFi laid off about 20 percent of its workforce to cut costs.

The Wall Street Journal reported in a report, citing people with knowledge of the deal, that it would allow BlockFi to get funding amid a downturn in the crypto market. Both firms recently reported that BlockFi has signed a term sheet with FTX for a credit of approximately $250 million. However, there is no agreement on equity between these firms. In this regard, BlockFi said that the firm does not comment on market speculation. A spokesperson for the firm said, “We are negotiating the terms of the deal and cannot provide further details.”

An FTX spokesperson did not comment. The decline in the crypto market has added to the difficulties for many firms in this segment. There was a major fall in the equity market due to the increase in interest rate by the US Federal Reserve and fears of recession. Since then there has been a sell-off in cryptocurrencies as well. The price of Bitcoin, the largest cryptocurrency by market capitalization, recently dropped below $20,000. This is its low level in about 18 months. However, since then there has been some recovery in the price of bitcoin and is trading above $21,000.

Recently Coinbase, one of the major crypto exchanges, also decided to reduce its staff strength by about 18 percent. Headquartered in the US, the firm is expected to lay off over 1,000 employees. Coinbase has given this information to the employees affected by this via email. Brian Armstrong, the exchange’s chief executive officer, took the hiring responsibility for the exchange in a blog post, saying that a lot of people were recruited in the past few months and this is affecting the firm’s efficiency.

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