Crypto derivatives exchange FTX has reportedly reached a deal to purchase Bithumb, one of the leading crypto exchanges in South Korea. According to anonymous sources, both exchanges have been negotiating a deal for several months, and it now looks almost certain that a deal has been brokered.
At the time of writing this report, neither Bithumb nor FTX has responded regarding the confirmation of the deal.
FTX co-founder and chief executive Sam Bankman Fried has continued to support crypto firms suffering liquidity crises, including top crypto lenders, Voyager Digital and BlockFi. Bithumb is one of the only five exchanges in South Korea with operational licenses to offer cash to crypto services. In terms of trade volumes, Bithumb accounts for 17.1% of the total crypto trade volume in South Korea, behind Upbit exchange.
FTX offers to bail out BlockFi
Previously, FTX signed a definitive agreement to provide BlockFi with a $400 million revolving credit facility which will be subordinate to all clients’ funds. There is also an agreement to buy BlockFi for about $240 million based on the performance target. As part of the deal with FTX, BlockFi will prioritize clients’ funds, expanding on a previous term sheet for a $250 million revolving credit facility from FTX.
Meanwhile, BlockFi is yet to take advantage of the credit facility and has continued to operate its services normally. That said, BlockFi has announced nearly $80 million in losses, a fraction of what other top lenders like Voyager Digital, Three Arrows Capital, and Celsius have announced in recent times.
It is still unclear whether FTX’s option to buy BlockFi compensates only investors in the top tranche of BlockFi’s latest raise. Despite the FTX buy option, one of BlockFi’s investors Morgan Creek, is reportedly preparing a counter offer to match what FTX is offering, as the current FTX term sheet will allow the crypto exchange to buy BlockFi at essentially zero price.
While BlockFi continues to explore financing options to mitigate losses suffered in recent times, it remains to be seen whether FTX eventually buys the company.