BlockFi to Sell $160M in Bitcoin Miner-Backed Loans: Report

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Bankrupt crypto lending firm BlockFi reportedly intends to sell $160 million in loans backed by around 68,000 Bitcoin mining machines in bankruptcy proceedings.

In a January 24 Bloomberg report, two people familiar with the matter claimed that BlockFi began the process of selling the loans last year.

The crypto lender filed for Chapter 11 bankruptcy in November, citing its large exposure to now-defunct crypto exchange FTX for its downfall.

However, some of those loans have already defaulted since then and may be undersecured given the drop in the price of Bitcoin mining equipment, the sources said, adding that the last day for bidders to submit bids for the ready is January 24.

In comments to Cointelegraph, crypto lawyer Harrison Dell, principal of Australian law firm Cadena Legal, explained that if bitcoin mining equipment used as collateral is worth less than the value of the loans, the loans are no longer worth their money. paper value for BlockFi.

Dell said the people bidding on the debts are likely debt collection companies buying for pennies on the dollar.

He added that selling the debt is likely all BlockFi administrators can recover for those assets.

Dell also suggested that this was just the start of what was to come for the crypto industry. He noted:

This is just the beginning of the asset sales of BlockFi and other crypto companies in the context of the Chapter 11 bankruptcy in the United States

Cointelegraph has reached out to BlockFi for comment but has not received a response at press time.

BlockFis’ attempt to liquidate its loans is likely part of efforts to repay its creditors, which it filed for bankruptcy in November numbered more than 100,000.

At the time of its bankruptcy, BlockFi was reported to have sold $239 million of its own cryptocurrency assets to cover bankruptcy costs and warned about 70% of its staff that they would lose their jobs.

Related: BlockFi’s Bankruptcy Filing Triggers Wide Range of Community Backlash

Earlier this week, BlockFi asked the court in a Jan. 23 statement to release funds to allow bonuses to key employees in an effort to hold them back amid Chapter 11 bankruptcy proceedings.

BlockFis chief human resources officer, Megan Crowell, told the court that without financial incentives, the company is unlikely to be able to retain its employees.

Crowell said it is highly likely that many employees will leave the company without competitive compensation, noting that this would add further financial impact to the company in the future.

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