Dan Primack at Axios reports that the rumored BlockFi sale to FTX is done. It will be for $240 million at the high end (if earnouts are achieved). There's no word on the low end or the reported (and denied) $25m deal from yesterday.

In any case, the company was raising money at $4 billion valuations and investors poured in more than $1 billion, so huge losses are coming. I'm sure employees were paid in stock as well, so morale will be a real challenge. The brand is obviously badly tarnished as well.

blockfi sale

Update: BlockFi CEO Zac Prince now offers details.

Yesterday we signed definitive agreements, subject to shareholder approval, with FTX US for:
1. A $400M revolving credit facility which is subordinate to all client funds, and
2. An option to acquire BlockFi at a variable price of up to $240M based on performance triggers.
This, together with other potential consideration, represents a total value of up to $680M.
We have not drawn on this credit facility to date and have continued to operate all our products and services normally. In fact, we raised interest rates, effective today.
So, what events led up to this deal with FTX US?
Crypto market volatility, particularly market events related to Celsius and 3AC, had a negative impact on BlockFi. The Celsius news on June 12th started an uptick in client withdrawals from BlockFi’s platform despite us having no exposure to them.
In the same week, 3AC news spread further fear in the market. While we were one of the first to fully accelerate our overcollateralized loan to 3AC, as well as liquidate and hedge all collateral, we did experience ~$80M in losses, which is a fraction of losses reported by others.
This represents the full extent of the impact to BlockFi from 3AC. We have no further exposure and the limited losses we did experience will be absorbed by BlockFi with no impact to client funds.
Our 3AC losses will be part of 3AC’s ongoing bankruptcy case(s) so more info will surely come out as those cases proceed.

It's always 'volatility ' and never 'terrible risk management'. How does an $80m loss on a company that's raised $1 billion lead to a firesale? This is certainly not the whole truth.