FTX in Discussion to Acquire Stake in BlockFi: Report

The Wall Street Journal reported that cryptocurrency exchange FTX is in talks to acquire a stake in crypto lender BlockFi, citing people familiar with the matter. The companies previously announced on Tuesday that BlockFi had signed a term sheet with FTX for a $250 million revolving credit facility, which will provide BlockFi with critical capital amid a digital currency market meltdown.

According to the Wall Street Journal, no equity agreement has yet been reached, and discussions are ongoing. A BlockFi spokesperson said in a statement that the company "does not comment on market rumours." "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.

BlockFi announced last week that it was reducing its headcount by about 20%, in addition to implementing other cost-cutting measures such as reducing marketing spending and executive compensation.

The aggressive rate hikes by the United States Federal Reserve, combined with recession fears, have caused turmoil in equities and a sell-off in cryptocurrencies. Bitcoin, the world's largest cryptocurrency, fell below the critical $20,000 level last weekend for the first time since December 2020.