Ledn Could Benefit From BlockFi Acquisition, Says Bloomberg
A BlockFi acquisition is a potential for Ledn, another crypto enterprise that was spotlighted by Bloomberg, as the entity stated in its report.
Ledn (a cryptocurrency platform) has reportedly expressed its intention to acquire a stake in BlockFi (a digital asset firm that offers crypto-backed loans). Earlier, FTX also announced plans to buy the latter, offering only $25 million for the acquisition.
Ledn, who was the first to arrive at the scene of the crash,
BlockFi, a firm that's part of the cryptocurrency market, has been affected by the crash. Earlier this month, CEO Zac Prince said that BlockFi will reduce its workforce by 20% as redundancies will impact every team in the company.
“This decision was driven by market conditions that have had a negative impact on our growth rate and a rigorous review of our strategic priorities,” he stated.
In the wake of BlockFi's failure to register as a securities trading platform, the State of Iowa ordered it to pay an administrative penalty in excess of $1 million.
Amid all these issues, the struggling company obtained a credit from FTX worth $250 million. Days later, the leading exchange announced its intention to buy BlockFi for just $25 million (given that BlockFi's latest known private valuation was $3 billion). Prince, though, denied rumors that the amount will be just $25 million.
A recent report by Bloomberg says that Ledn, a Canada crypto lender, made an offer similar to FTX's. Unlike FTX, it plans to finance the deal with fresh capital instead of buying the whole firm.
A Ledn spokesperson said that the financial services provider will lead a $400 million fundraising effort and make a $50 million equity investment, which may give it significant control over BlockFi.
“Given its operational strength, Ledn is currently evaluating a number of opportunities to broaden its leadership in digital asset lending and beyond. At the moment, we cannot share any additional details.”
BlockFi described the information as “market rumors” and declined to comment.
BlockFi's Success Before the Market Crash
The US-based firm that calls itself a "financial services company that builds a bridge between cryptocurrencies and traditional financial and wealth management products" had quite successful moments last year.
In March 2021, BlockFi raised $350 million in a Series D funding round led by Tiger Global, Bain Capital Ventures, and Pomp Investments. As a result of the investment, BlockFi's valuation increased to $3 billion.
Last summer, BlockFi partnered with NBA star Cade Cunningham. In the deal, Detroit Pistons's icon agreed to participate in educational videos and interviews; BlockFi said his efforts will be paid directly in bitcoin.
At the end of 2021, the company filed an application with the US SEC to create a physically-backed bitcoin ETF. The product, called "BlockFi NB Bitcoin ETF" (with a ticker symbol BBBB), is supposed to issue shares that track the performance of bitcoin held by the trust.