On the morning of June 30, the news site TheBlock Citing an insider source, revealed more “confidential” information shared during a meeting between hedge fund manager Morgan Creek Digital, which participated in many of BlockFi's past funding rounds, Mr. Mark Yusko with Mr. related parties.
Post by TheBlock confirmed earlier rumors published by CoinDesk, specifically that FTX had a full BlockFi buyout clause included in the $250 million loan agreement, along with other “insider only” information.
BlockFi's valuation is now only 500 million USD
Mr. Yusko announced that the loan agreement between FTX and BlockFi was made with the company's valuation of only 500 million USD. This is the basis for FTX's BlockFi buyback clause because in essence, the exchange will become the company's largest shareholder when it proceeds to contribute nearly 51% shares.
This news is extremely shocking because in March 2021, BlockFi raised $ 250 million at a valuation of up to $ 3 billion, and is rumored to have made another round of funding worth $ 500 million at a valuation. 5 billion USD. The new valuation launched by FTX marks the reduction of the company's value to 90%.
In May and June, it was reported that BlockFi struggled to raise $ 100 million at a valuation of $ 1 billion, but it seems to have been unsuccessful and had to look to FTX.
BlockFi lends Three Arrows Capital $1 billion
Next, TheBlock confirmed that Mr. Yusko confirmed the value of the loan that BlockFi provided to the investment fund Three Arrows Capital with a value of up to $ 1 billion, mortgaged by 2/3 with Bitcoin and the remaining 1/3 in Grayscale shares of GBTC.
Amount 2/3 Bitcoin The above has been liquidated by BlockFi as confirmed by the company, but the GBTC, estimated to be worth about $430 million, cannot be sold at this time because the stock is depreciating 34% compared to 34%. Bitcoin. If GBTC is released, BlockFi is worried that it could crash the market.
Three Arrows Capital is an investment fund cryptocurrency famous, but suffered heavy damage after the fall of LUNA-UST in May, followed by massive asset liquidation when the market continued to correct in June. The fund was found to have borrowed unsecured assets from a series of other entities, creating a widespread knock-on effect. .
BlockFi prepares to cut more staff
BlockFi in mid-June announced 20% staff cuts because of the difficult situation.
However, Mr. Yusko says this is just the beginning. During the meeting, the Morgan Creek Digital manager revealed that BlockFi was considering "more draconian austerity measures", including the possibility of laying off "80-85%" employees.
Representatives for Morgan Creek Digital, BlockFi, and FTX all declined to comment on the post TheBlock. A BlockFi spokesperson stated:
“BlockFi will not comment on rumors. Information beyond the official statement of BlockFi or FTX is currently just baseless speculation.”