When now bankrupt crypto exchange ftx acquired crypto mobile app Blockfolio, the payment was made not in cash but as FTX’s own ftt Token, as revealed by the financial statements.
According to Bloomberg, which said it received financial details from FTX, that approximately 94% of block portfolio acquisitions were paid in FTT tokens. The amount paid for the 52% equity stake in Blockfolio was roughly $84m.
The original deal came with an option for FTX to buy the rest of the company within two years, and the block portfolio was valued at approximately $160m.
Contrary to earlier reports
The new Bloomberg report is the exact opposite of what was previously believed about the situation surrounding the acquisition.
According to media reports at the time, FTX paid $150m for the block portfolio when the transaction took place in mid-2020. The price was reportedly paid in cash, crypto and equity.
Looking at the latest report from Bloomberg, however, it is clear that the cash and equity portion of the payout is almost nothing compared to the massive transfer of FTT tokens.
FTX organized a large amount of FTT
FTT tokens were created by FTX for use by traders on its exchange. As reported, FTX holds a significant amount of FTX on its balance sheet. It has also happened widely Reported The same was true for Alameda Research, the trading firm of Sam Bankman-Fried.
Given the large holding of FTT by these two entities, the fall in FTT price also contributed significantly to the downfall of both the firms.
Since hitting its all-time high of $85 in September 2021, FTT has dropped nearly 99% in price to $0.97 at press time. The total market capitalization of the token was $323m at the time of writing.
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