Crypto’s cataclysmic first half ended on Thursday with a disputed CNBC report that crypto lender BlockFi could be sold to FTX for a base price of just $25 million.

Why it matters: BlockFi has raised around $1.2 billion in venture funding, from investors like Dan Loeb, Tiger Global and Bain Capital Ventures. There are lots of different ways to calculate VC returns but, in this case, all methodologies lead to sadness.

What to know: BlockFi CEO Zac Prince called BS on the “market rumors,” tweeting: “I can 100% confirm that we aren’t being sold for $25M.”

  • A source familiar with the process says that FTX has just been one of numerous suitors, and that most of the proposals have been structured with wide valuation ranges that could top out in the hundreds of millions of dollars.
  • For example, several bids included milestone-based earnouts. Some were primarily equity, which theoretically could increase in value. According to Bloomberg, a rival offer from Ledn includes some new funding.
  • Expectations are that a deal could be signed by as early as today, if only to alleviate employee stress over the holiday weekend. It’s also worth noting that FTX last week provided BlockFi with a $250 million emergency credit line.

What happened: BlockFi got unexpectedly hammered by the liquidation of crypto hedge fund Three Arrows Capital, to which it was a counterparty via an overcollateralized margin loan.

  • It appears that BlockFi was immediately able to offload the related Bitcoin, but couldn’t trade underlying Grayscale’s Bitcoin Trust (GBTC) shares because the markets were closed.
  • Crypto evangelists would argue that this is a failure of centralized systems and legacy trading times, while DeFi lending continues to function without fault. (Go deeper: Crypto finance isn’t always DeFi)
  • Crypto skeptics would argue this highlights the risks of being overexposed to any industry actor, given the potential for folly and fraud.

The bottom line: Look out below.