According to a story by Bloomberg on Wednesday, which cited individuals with knowledge of the subject, the cryptocurrency lending platform BlockFi is reportedly preparing to attract additional capital at a reduced $1 billion value.
It is important to keep in mind that the firm had a valuation of $3 billion in March 2021 after raising $350 million in a Series D round of funding.
According to the source, the company’s planned fundraising may bring in over one hundred million dollars. However, the specific amount of financing that it will be able to get is not yet known at this time. It is anticipated that investors such as Bain Capital Ventures, DST Global, Castle Island Ventures, and Peter Thiel’s Valar Ventures would join in the round of funding.
The decrease in value comes at a time when the cryptocurrency market is transitioning into a new period of volatility. After reaching over $3 trillion in November, the entire market value has since fallen to around $1.2 trillion.
The alleged increase is also a response to the regulatory problems that BlockFi has been facing with United States authorities. In February, BlockFi reached an agreement to settle the matter by paying a fine of one hundred million dollars to the United States Securities and Exchange Commission (SEC) and thirty-two states.
The firm was accused by the SEC with failing to register their loan product, which was given the name “BlockFi Interest Accounts” (BIAs). In addition to this, the cryptocurrency company was accused of breaking the terms of the Investment Company Act of 1940 that dealt with registration.
Despite the poor circumstances in the market, investors have continued to place significant bets on cryptocurrency companies. During the month of May, the cryptocurrency exchange known as Elwood was successful in raising a total of $70 million in funding from significant financial organizations including as Goldman Sachs, Barclays, Dawn Capital, Digital Currency Group, and Galaxy Digital Ventures.
Andreessen Horowitz (a16z), an American venture capital company, recently made the announcement that it has successfully collected $4.5 billion to fund the Web3 ecosystems.
InfStones, a supplier of blockchain infrastructure, has raised a total of $66 million in investment, the majority of which came from SoftBank Vision Fund 2 and GGV Capital.