As part of its bankruptcy proceeding, crypto lending firm BlockFi will sell $160 million in loans backed by approximately 68,000 Bitcoin mining equipment, according to a Bloomberg report on January 23.
Citing people familiar with the issue, Bloomberg noted that the bidding process for the assets in question would close on January 24, 2023.
Since BlockFi plunged into bankruptcy, it has been working to liquidate its loans to pay off its over 100,000 creditors. Also, in that regard, the lender reduced its workforce by 70% while selling $239 million of its virtual assets.
Recall that BlockFi’s recent liquidity struggles came into play following the collapse of FTX. The crash disrupted the crypto market atmosphere, affecting firms within its blasting radius.
Presently, the lender is struggling to keep its employees amidst the bankruptcy proceedings. Through a declaration yesterday, the firm solicited the bankruptcy court to allow BlockFi to introduce bonuses for prominent staff, as without that, it would be difficult to keep some top employees.
The bankrupt firm argued that losing top staff members would add more financial constraints, thus, compounding its deficiencies.
Aside from its lending services, BlockFi is also known for its mining exploits. The struggles within the mining space affected the firm’s financial stability. Some of the loans backed by the mining rigs have already defaulted since the firm filed for bankruptcy.
Crypto miners struggle to remain in business as BTC plummeted for most of 2022. Similarly, the hike in energy prices further inflicts more losses for miners, pushing the value of mining facilities by 80% within the year.
As a result of miners’ struggles last year, firms like Argo Blockchain and Celsius had to sell some of their mining facilities. While a popular miner, Core Scientific has filed for Chapter 11 bankruptcy protection.
BlockFi owes more than 100,000 creditors, and its debts and assets range between $1 billion and $10 billion. However, the sell-out may help the firm to stabilize its finances.
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