TechFlow news, according to The Block, leaked audio from an investor call revealed that Morgan Creek Digital is attempting to quickly raise $250 million in cash to acquire a majority stake in BlockFi. The proposed valuation in the new funding round is below $500 million, a sharp drop from BlockFi's previous valuation of over $5 billion last year.
Mark Yusko, managing partner at Morgan Creek, said their bid is a direct countermove against FTX. Yusko told investors on the call that if FTX exercises its option, it would effectively wipe out all existing shareholders on BlockFi’s cap table. Previously, FTX signed a term sheet with BlockFi to provide it with a $250 million revolving credit facility.
Additionally, BlockFi extended a loan of approximately $1 billion to 3AC, collateralized by two-thirds Bitcoin and one-third GBTC, with a 30% over-collateralization rate. On June 16, BlockFi’s CEO confirmed on Twitter that the company had liquidated an over-collateralized loan from a major client.
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