Bailing out the crypto lending platform BlockFi has become one of the most significant endeavours for early investors in the company such as Morgan Creek Digital.
According to an exclusive Coindesk report, the crypto investment manager has been wooing investors in a bid to raise $250 million to counter the offer from FTX Derivatives Exchange.
The Coindesk report was centred on a leaked call made by Morgan Creek Digital’s managing partner, Mark Yusko.
Per the reviewed call, Yusko was learned to have explained the details of the BlockFi and FTX’s offer, which he said, if finalized, may cost early investors like Morgan Creek their investments as FTX can acquire the firm at almost zero cost. To prevent this from happening, Yusko solicited immediate funding from investors to make a counter offer that could at least benefit the investment firm should BlockFi declare bankruptcy amidst the encompassing crypto winter.
Yusko noted that BlockFi co-founders had to pitch tents with FTX because the exchange was the only one that offered a bailout in which clients’ funds are protected. Additional details of the deal are notably being discussed at the moment.
“We are still negotiating the terms of the deal and cannot share more information at this time,” a BlockFi spokesperson told CoinDesk on Saturday. “We anticipate sharing more on the terms of the deal with the public at a later date.”
Bailouts are now becoming a major lifeline for the crypto startups that are most hit by the ongoing crypto market meltdown. With Celsius Network also on the brink of declaring bankruptcy, Goldman Sachs is reportedly raising funds to acquire the embattled crypto lender should it come to that.
Mark Yusko is flexible in his bid to pilot Morgan Creek into becoming a part-owner of BlockFi, and he said he is open to a joint takeover with Sam Bankman-Fried if it comes to that.
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