BlockFi to Sell $160M in Loans Backed by Bitcoin Miners: Report

Bankrupt crypto-lending firm BlockFi plans to sell $160 million in loans backed by about 68,000 bitcoin mining machines as part of bankruptcy proceedings.

In Bloomberg Reports On January 24, two people “familiar with the matter” claimed that BlockFi began selling loans last year.

The crypto lender filed for Chapter 11 bankruptcy in November 2022. Referring to his main exhibition To the now-defunct crypto exchange FTX for its downfall.

However, some of these loans have already defaulted and can be subsidized. Given the price drop bitcoin mining equipment The last day for bidders to submit offers for the loans is January 24, according to sources.

In comments to Cointelegraph, crypto lawyer Harrison Dale, director of Australian law firm Cadena Legal, explained that if the bitcoin mining equipment used as collateral is worth less than the loans, then the loans “ No longer worth their paper value for blockchain.”

People bidding on loans are “most likely” buying debt collection businesses for “cents on the dollar,” Dell said.

He added that it is possible to sell the debt so that “BlockFi administrators” can salvage these assets.

Deal also suggested that this is just the beginning of things to come for the crypto industry. He noted:

“This is just the beginning of the sale of assets from BlockFi and other crypto firms in Chapter 11 bankruptcy in the US.”

Cointelegraph reached out to BlockFi for comment but did not receive a response by the time of publication.

BlockFi’s attempt to pay off its debts is likely part of its efforts to pay off its creditors, according to its bankruptcy filing. Filing As of November 2022, the company has more than 100,000 borrowers.

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

Related: BlockFi’s bankruptcy filing triggers a wide range of community reactions.

Earlier this week, BlockFi requested the court in an announcement on January 23 to release the funds. Allow bonuses for key employees. In an effort to maintain them in the midst of a Chapter 11 bankruptcy proceeding.

BlockFi’s chief people officer, Megan Crowell, told the court that without financial incentives, it’s unlikely the company would be able to retain its employees.

Crowell said it is highly likely that many staff will leave the company without competitive compensation, noting that this will have a further financial impact on the company.