FTX is approaching an agreement to buy the controversial cryptocurrency lender BlockFi for 25 million dollars in a fire sale, says source

FTX moves in to buy cryptocurrency lender BlockFi for pennies on the dollar, sources told CNBC.

Termarket is almost over the finish line and is expected to be signed by the end of the week, according to three sources, who asked not to be named because the agreement discussions were confidential. FTX is expected to pay about $ 25 million, a source said, 99% during BlockFi’s latest private valuation. Another person with direct knowledge of the agreement fixed the price close to 50 million dollars. Jersey City, New Jersey-based BlockFi was last valued at $ 4.8 billion, according to PitchBook.

The price tag can change between now and Friday, the source said. An acquisition can also take several months to complete. The person added that the agreement may end up as alternatives to buying BlockFi at a later date, pending regulatory approval.

Friday also marks the end of the quarter, which a source said was a catalyst for signing an agreement. The Wall Street Journal first reported that FTX was seeking a stake in the company, while The Block reported this week that a direct deal was in the works.

A spokesman for FTX said the company “would not comment on the matter.” A BlockFi spokesman said the company “does not comment on market rumors.” BlockFi CEO Zac Prince pushed back the figure of 25 million dollars in a tweet that called the number “market rumors”.

The fire sale comes a week after FTX gave a $ 250 million emergency loan to BlockFi. FTX chief Sam Bankman-Fried said at the time that the funding would help BlockFi “navigate the market from a position of strength.”

This is the latest downturn for crypto-loan companies amid falling cryptocurrency prices. The funds have struggled with liquidity problems as counterparties are unable to meet margin requirements. Celsius and CoinFlex stopped customer withdrawals citing “extreme market conditions.” The large hedge fund for cryptocurrency Three Arrows Capital has fallen into liquidation, CNBC reported earlier, marking one of the biggest victims in the crypto bear market.

Another source said that BlockFi stock investors have been “wiped out” and are now writing off the value of their losses. The person said that several offers were considered, since there was no “store clause” in the term market.

“There was more than one deal on the table,” a source told CNBC.

Billionaire Bankman-Fried has been seen as a lender of last resort in space. In addition to BlockFi, Bankman-Peace’s company Alameda Research provided a $ 500 million loan to Voyager.

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