FTX

SBF denies FTX is eyeing distressed crypto mining companies

Sam Bankman-Fried said that crypto miners did not fit into the company’s core strategy and there is no synergy from an acquisition standpoint.

Sam Bankman-Fried, the founder of crypto exchange FTX, has calmed speculation that the company is exploring acquisitions of distressed crypto mining companies, clarifying on Twitter on Saturday that they “aren’t really looking into the space.”

“Really not sure why the meme about FTX and mining companies is spreading, the actual quote was that we *aren’t* really looking into the space,” clarified Bankman-Fried on Twitter on Saturday.

Speculation that the company was on the lookout for mining firms came from an interview with Bloomberg on Friday, after the FTX founder said he did not want to discount the possibility of a “compelling opportunity” in the mining industry, stating:

“There might come along a really compelling opportunity for us — I definitely don’t want to discount that possibility.”

However, the quote appears to have been taken out of context, forcing SBF to clarify that the firm is “not particularly looking at miners” but is “happy to have conversations” with mining companies.

Bankman-Fried also stated during the interview that crypto miners had no fit into the company’s core strategy and that he saw no synergy from an acquisition standpoint:

“I don’t see any particular reasons that we need to have, you know, an integration with a crypto miner.”

“From a strategic perspective, there’s no particular obvious synergy necessarily from an acquisition standpoint,” he added.

Mining loans under stress

Bankman-Fried was asked whether he was looking into mining firms amid a falling crypto market that has seen Bitcoin mining revenues fall sharply this year.

At the same time, the Russian invasion of Ukraine has also caused energy costs to skyrocket — causing a dual impact on miners, small and large.

Mining profitability, which is a measure of daily dollars per terahashes per second, has reached lows not seen since October 2020, according to Bitinfocharts. At the time of writing, Bitcoin mining profitability is $0.0956 per day for 1Th/s, down 80% from the 2021 high of $0.464.

A report from Bloomberg on June 24 revealed that there were as much as $4 billion in Bitcoin mining loans, with a growing number now underwater as Bitcoin and mining rig prices have fallen.

Related: Bitcoin miner Mawson to defer all major capital expenditures until market conditions normalize

Last week, Cointelegraph reported that Bitcoin (BTC) mining revenue has been mirroring year lows not seen since mid-2021, with Bitcoin mining revenue dipping to $14.40 million on June 17.

Data from Arcane Research in June found that the deteriorating profitability of mining has forced public miners to start liquidating their holdings. It revealed that several of these firms sold 100% of their BTC production in May — likely to cover operating costs and loan repayments.

BlockFi announces deal with FTX US, including ‘option to acquire’ for $240M

According to CEO Zac Prince, BlockFi signed agreements with FTX US totaling $680 million — for a company that had a $5 billion valuation in June 2021.

FTX US has inked a deal with BlockFi that will give the crypto derivatives exchange the option to purchase the lending firm.

In a Friday Twitter thread, BlockFi CEO Zac Prince said the crypto lending firm had signed agreements with FTX US for a $400-million revolving credit facility as well as the option to acquire BlockFi “at a variable price of up to $240 million based on performance triggers.” According to the CEO, the deal was reached as part of an effort “to bolster liquidity and protect client funds” at BlockFi.

The agreements are still subject to shareholder approval. Prince said volatility in the crypto market, “particularly market events related to Celsius and 3AC,” which had a negative impact on BlockFi, led to the decision. The crypto lending platform suffered roughly $80 million in losses the week following Celsius pausing withdrawals, and, after considering “​​various unattractive options” for recovery, partnered with FTX US.

“All of our products and services — including funding and withdrawals, our trading platform, credit card and global institutional services — continue to operate normally, with incremental capital strength behind them,” said Prince.

In a Friday blog post, BlockFi criticized reports from Thursday claiming FTX intended to purchase the firm for $25 million. According to the CEO, the $400 million credit facility, $240 million acquisition price and “other potential consideration” totaled $680 million — for a company that had a $5 billion valuation in June 2021. Prince hinted the report was due to “an inappropriately leaked call” and “purely personal conjecture by a single party.”

Related: FTX US acquires Embed Financial subsidiary for stock trading platform

BlockFi was one of the first firms to liquidate some of Three Arrows Capital’s positions in June after the company reportedly failed to meet margin calls from its lenders. Amid the market downturn and extreme price volatility, the crypto lending firm announced that it would be laying off 20% of its 850-strong staff, retaining roughly 600 people. It’s unclear if a FTX US acquisition would change this decision.

BnkToTheFuture unveils 3 proposals to rescue Celsius from oblivion

BnkToTheFuture’s three proposals include two different ways to restructure and relaunch the firm or an option to co-invest in the firm with a bunch of Bitcoin whales.

Celsius’ lead investor BnkToTheFuture has outlined three proposals to save Celsius from bankruptcy while finding a good outcome for shareholders and depositors with funds stuck on the platform.

Shared on Twitter by BnkToTheFuture CEO Simon Dixon on Thursday, the three distinct proposals include either two options of restructuring and relaunching Celsius or potentially co-investing in the platform alongside wealthy Bitcoin (BTC) whales.

“Proposal #1: A restructuring to relaunch Celsius and allow depositors to benefit from any recovery through financial engineering.”

“Proposal #2: A pool of the most influential whales in Bitcoin to co-invest with the community.”

“Proposal #3: An operational plan that allows a new entity and team to rebuild and make depositors whole.” 

Dixon previously referred to “financial innovation” being needed to be applied to Celsius, similar to the issuance of equity debt tokens like in the case of Bitfinex in 2016, which were designed to represent $1.00 of debt per token.

“We believe all attempts should be made to make depositors whole in order to maintain shareholder value,” the team wrote, adding it will be calling for a shareholder meeting that “legally cannot be ignored by the Celsius board:”

“Bnk To The Future Capital SPC holds over 5% of Celsius shares and therefore we believe that this allows us to call a shareholder meeting as part of our statutory shareholder rights that legally cannot be ignored by the Celsius board.”

BnkToTheFuture also suggested that after first submitting these proposals to Celsius and its advisers, it is now looking to “apply pressure” on the firm after getting “worried that time was running out” with its lack of a distinct plan of action. These sentiments were also echoed by Dixon in a Digital Assets News Interview on the same day:

“You have to move really fast, because the longer you go on, the more FUD comes out, bad PR comes out, more predatory offers come out, the more the community stops believing in what they originally believed in.”

Celsius’ users have been unable to withdraw assets from the platform since June 13 amid the firm’s ongoing liquidity issues. Meanwhile, there are fears that users may never get their funds back if the company were to go bankrupt.

Celsius may have its own solution

In a blog post on Friday, Celsius stated that it is working as fast as it can to stabilize its liquidity problems so that it can be “positioned to share more information with the community.”

While the firm did not reveal much about what this entails, Celsius stated that it is exploring options to protect its assets such as pursuing strategic transactions as well as a restructuring of our liabilities, among other avenues.

“These exhaustive explorations are complex and take time, but we want the community to know that our teams are working with experts from many different disciplines,” the blog post read.

FTX walked away from Celsius deal over bad financials

Related: Contagion: Genesis faces huge losses, BlockFi’s $1B loan, Celsius’s risky model

Reports surfaced on Thursday that Sam Bankman-Fried’s crypto exchange FTX recently walked away from a deal to purchase Celsius after finding a $2 billion hole in the company’s finances.

According to two unnamed sources close to the matter, FTX had entered talks with Celsius to either provide financial support or acquire the firm outright. However, apart from having $2 billion, an account for Celsius was said to be difficult to deal with.

FTX on the verge of purchasing BlockFi in $25M fire sale: Report

The cryptocurrency derivatives exchange could potentially buy out the troubled lender for pennies on the dollar.

Cryptocurrency exchange FTX is close to purchasing digital asset lender BlockFi’s remaining assets for $25 million, according to CNBC.

According to sources close to the matter, BlockFi’s equity investors were wiped out and are now writing their positions off at a loss. In addition, the FTX deal could take multiple months to close, opening up the possibility that the price tag could shift over that period. In June 2021, BlockFi had a reported valuation of $5 billion.

BlockFi CEO Zac Prince has since denied these rumors, taking to Twitter on June 30 to refute speculation that the company is being sold for $25 million.

Earlier this year, BlockFi had over 1 million clients, over $10 billion in assets and deposits, and had distributed more than $700 million in crypto rewards and interest. However, BlockFi’s fortunes quickly soured after it reportedly became a major creditor of the now troubled hedge fund Three Arrow Capital, also known as 3AC. As a result, it was forced to liquidate 3AC’s positions amounting to $1.33 billion, likely at a severe loss as the bear market intensified in June. 

The situation was exacerbated by 3AC posting collateral for the loan in $400 million worth of Grayscale Bitcoin Investment Trust (GBTC) shares, which often trade at a discount or premium to spot Bitcoin (BTC) prices. At the time of liquidation, GBTC shares were trading at a 34% discount to the net asset value of its Bitcoin holdings, which plunged further as BlockFi began closing the position.

Related: FTX may be planning to purchase a stake in BlockFi

Earlier this month, BlockFi said it would fire 20% of its 850-strong staff due to profitability woes in the short term. Just last week, FTX had extended a $250 million line of credit to BlockFi and denied rumors that it was acquiring the ill-fortuned firm. 

Update: Added Zac Prince’s latest Twitter update denying the company is being sold for $25 million. 

Biggest Bitcoin exchange inflows since 2018 put potential $20K bottom at risk

Traders are nervous, data suggests, and a further drop could spark a chain reaction as exchange users rush to liquidate their BTC holdings.

Bitcoin (BTC) could be on the verge of a retail major sell-off as exchange inflows spike to almost three-and-a-half-year highs.

Data from on-chain analytics platform CryptoQuant shows users of 21 major exchanges sending coins to their wallets en masse on June 14.

Major exchanges finish up 83,000 BTC in a single day

As BTC/USD fell to lows of $20,800, panic appeared to set in among traders, and despite a reversal that at one point topped $23,000, few seemed willing to trust that the worst was over.

Since then, spot price action has returned to near $21,000, while 24-hour exchange inflows reached 59,376 BTC.

According to CryptoQuant data, this is the largest daily inflow since November 30, 2018. On that day, exchanges recorded 83,481 BTC of net inflows.

May 9, 2022 ended with 29,082 BTC in net inflows for the platforms monitored by CryptoQuant.

Concerns may now turn to whether even more sell-side pressure will emerge in Bitcoin markets over the coming days and weeks. Around a month after the 2018 influx, BTC/USD hit its cycle bottom of $3,100, 84% below its prior all-time high of $20,000.

Bitcoin exchange netflows chart. Source: CryptoQuant

As Cointelegraph recently reported, analysts are of mixed opinion when it comes to whether Bitcoin will repeat the trend this cycle. An 84% drawdown would mean a bottom of just $11,000.

In a separate analysis of the price situation, statistician Willy Woo concluded that macro market movements would dictate Bitcoin’s bottom.

“I think it’s simpler than this, IMO we’ll find a bottom when macro markets stabilise,” part of a Twitter thread contemplating various price support theories read.

FTX, Binance see particularly heavy selling

Analyzing who has been selling so far, meanwhile, CryptoQuant CEO Ki-Young Ju pointed the finger at derivatives traders and the largest global exchange Binance.

Related: ‘Too early’ to say Bitcoin price has reclaimed key bear market support — Analysis

Ki noted that the largest number of coin days destroyed — unmoved coins becoming active after a dormant period — came from those specific venues.

“This selling pressure came from Binance and FTX,” he wrote in a Twitter thread June 13:

“$BTC Exchange Inflow CDD(Coins Days Destroyed) indicates old whale deposits. Binance’s Inflow CDD reached a year-high before the drop.”

Bitcoin coin days destroyed for Binance, FTX (screenshot). Source: Ki Young Ju/ Twitter

Ki added that this was in contrast to other whales, who have been comparatively quiet throughout the price upheaval, which began with May’s Terra implosion.

Data from on-chain analytics resource Coinglass, meanwhile, shows the extent of downside bias on FTX, especially in recent days.

Bitcoin funding rates for Binance, FTX. Source: Coinglass

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Crypto.com gets nod in Dubai and FTX launches in Japan

Crypto.com will have further requirements before its full license is granted in the “near-term” and FTX said the move would allow it to work “directly with Japanese regulators.”

Two out of the top 10 largest cryptocurrency exchanges by volume will expand into new markets, with Crypto.com obtaining a provisional crypto license in Dubai and FTX launching in Japan.

Crypto.com announced on Thursday that the Dubai Virtual Assets Regulatory Authority (VARA) provided the exchange with provisional approval of its virtual asset license, giving the company the go-ahead based on initial compliance checks.

The exchange said that VARA will carry out further due diligence and other mandated requirements before its full operating license is issued, which it expects to happen in the “near term.”

Crypto.com said in March it would create a regional office in the United Arab Emirates (UAE) largest city after it enacted new laws for crypto and created VARA with the goal of making Dubai a global hub for crypto.

The UAE Minister of State for Foreign Trade, Thani Al Zeyoudi, said in the announcement that the country believes “cryptocurrencies, virtual assets and blockchain will revolutionize the financial services sector.” He added it’s “attracting companies to the UAE to build on this vision and enable technologies of the future to flourish here.”

FTX Japan launches

FTX — which has overtaken Coinbase to become the second-largest centralized exchange in terms of volume — has launched FTX Japan to service its Japanese customers after it acquired the local Liquid crypto exchange in February.

Japan has strict rules for crypto exchanges wanting to operate in the country with the commissioner of the crypto regulator, the Financial Services Agency (FSA), even admitting it makes things “rather tough” for exchanges.

FTX CEO Sam Bankman-Fried said that “Japan is a highly regulated market with a potential market size of almost $1 trillion” for crypto trading.

Related: Leading centralized exchanges extend market share in 2022

The expansions are in stark contrast to other major crypto firms that are having to cut staff due to the ongoing bearish conditions.

Gemini exchange reportedly plans to cut 10% of its employees due to the unfavorable market conditions, while Coinbase also announced in mid-May it’s slowing hiring to ensure it can weather the dampened market.

At the end of April, the crypto-friendly trading platform Robinhood fired 9% of its workforce, with its stock price at an all-time low as part of a wider market downturn.