Morgan Creek Digital Investment Company Cryptocurrency It is trying to raise $250 million from investors to buy a large stake in crypto lender BlockFi.
Morgan Creek’s plan came in response to crypto exchange FTX’s announcement Tuesday morning that it would extend a $250 million credit line to BlockFi.
Morgan Creek Digital declined to comment. But a person with knowledge of the effort said a number of venture capital funds were searching for ways to fund BlockFi, including longtime backer Morgan Creek.
Mark Yusko, managing partner at Morgan Creek Digital, said FTX’s credit line offer caught the attention of existing BlockFi shareholders: giving FTX the option to buy BlockFi “at a zero cost.”
If FTX uses that option It will effectively eliminate all existing shareholders of BlockFi. including executives and employees with stock options as well as all stock investors in the company’s previous joint venture
BlockFi CEO Prince TweetOn June 21 that the company signed preliminary study papers with FTX, in which Yusko told investors that day that FTX and BlockFi “may be three days away from signing a final agreement.”
“We are still negotiating the terms of the agreement and cannot release further information at this time,” a BlockFi spokesperson said Saturday. “We anticipate that further information about the terms of the agreement will be shared with the public at a later date.”
“The only option is to add the same amount in equity. And that’s what we’re working on,” Yusko told investors by phone. “I would say there is a 10% probability, but not zero.”
On Friday, the Wall Street Journal reportThat FTX is in talks to buy a stake in BlockFi, and Yusko said Morgan Creek will open a “conciliation deal” between FTX (led by billionaire Sam Bankman-Fried) and Morgan Creek.
“I will try to proceed. [ข้อตกลงร่วมกัน] Absolutely,” Yusko said.
Yusko said he spoke with a key investor who was able to write a $100 million check. as well as two other investors who “Show interest” and can write checks for up to $50 million.
Yusko cautioned that while Morgan Creek does everything possible to salvage its investment in BlockFi, its success is far from certain.
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