Bloomberg reports Ledn’s offer for BlockFi

Ledn, a competing platform, has approached BlockFi, the crypto-lending company in financial distress, with a deal proposal. This is reported by Bloomberg, citing sources.

According to the agency, the cryptocurrency exchange FTX led by Sam Bankman-Fried is in talks with BlockFi about a potential acquisition. CNBC noted that the proposed purchase price is $25 million, while in March 2021 the company’s reached $3 billion valuation.

BlockFi co-founder and CEO Zac Prince dismissed the reports:

“There are a lot of rumors in the market — I can 100% confirm that we are not being sold for $25 million. I urge everyone to trust only information that comes directly from BlockFi. We will share more as soon as we can.”

There are a lot of rumors in the market — I can 100% confirm that we aren’t being sold for $25M.

I encourage everyone to trust only details that you hear directly from @BlockFi.

We will share more w you as soon as we can.

— Zac Prince (@BlockFiZac) June 30, 2022

According to Bloomberg sources, Ledn’s offer does not entail a full acquisition, but contemplates providing additional capital.

Under Ledn’s terms, it would lead a BlockFi financing round of $400 million, and also contribute $50 million in equity. As a result, the company would obtain a “significant stake” in the rival.

CEO Ledn Adam Reeds said that “at this time he cannot share any further details”.

“Ledn is currently evaluating a range of opportunities to expand its leadership in digital asset lending and beyond,” he noted.

The Canadian platform offers yields of up to 7.5% per year on deposits in Bitcoin and the stablecoin USDC, and also lends funds. However, unlike some rivals, Ledn does not invest in DeFi protocols to earn income, Bloomberg notes.

BlockFi was among the firms hit by the liquidity crisis in the sector and the troubles at Three Arrows Capital (3AC). The firm acknowledged that it liquidated the position of a major client who failed to meet credit requirements. Reports indicate this referred to 3AC.

Earlier, reporters learned that Morgan Creek Digital planned to raise $250 million to acquire a controlling stake in BlockFi.

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