FTX, the bankrupt cryptocurrency exchange, used a token it invented to fund its takeover of trading platform Blockfolio, according to financial statements obtained by Bloomberg News. FTX paid roughly $84 million in 2020 to take a majority stake in Blockfolio, in what was then among the largest crypto acquisitions. About 94% was paid in FTT tokens, a cryptocurrency that FTX created, according to documents reviewed by Bloomberg. Details of the Blockfolio acquisition, which haven’t been previously reported, offer a glimpse of former FTX CEO Sam Bankman-Fried’s appetite for whimsical financial engineering, and an early hunger to amass customers through large-scale deals. Bankman-Fried doubled down on that ethos this year, going on a buyout binge for firms including Voyager and BlockFi, although those deals were thwarted when FTX imploded in November. At the time the Blockfolio deal was announced, news outlets reported FTX financed it with a mix of cash, crypto and equity, without further details. The arrangement heralded big things for FTX, which Bankman-Fried founded only a year before. The agreement gave it a 52% equity stake in Blockfolio and valued the company at almost $160 million — with the option to buy the rest within two years, the financial statements show.
