BlockFi to sell $160M in Bitcoin miner-backed loans: Report

Bankrupt crypto lending steadfast BlockFi has plans to merchantability disconnected $160 cardinal successful loans backed by astir 68,000 Bitcoin mining machines arsenic portion of bankruptcy proceedings, according to reports.

In a Bloomberg report connected Jan. 24, 2 radical “familiar with the matter” assertion that BlockFi started the process of selling disconnected the loans past year.

The crypto lender filed for Chapter 11 bankruptcy successful Nov. 2022, citing its important exposure to the now-defunct crypto speech FTX for its downfall.

However, immoderate of these loans person already defaulted since past and could beryllium undercollateralized given the diminution successful the price of Bitcoin mining equipment, according to the sources, adding the past time for bidders to taxable offers for the loans is Jan. 24.

In comments to Cointelegraph, crypto lawyer Harrison Dell, manager astatine Australian instrumentality steadfast Cadena Legal explained that if Bitcoin mining instrumentality utilized arsenic collateral is worthy little than the worth of the loans, the loans are “not worthy their insubstantial worth anymore to BlockFi.”

Dell said that the radical bidding for the debts are astir “likely” to beryllium indebtedness postulation businesses buying for “cents connected the dollar.”

He added that selling the indebtedness is apt “all that the administrators” for BlockFi tin salvage for these assets.

Dell besides suggested that this is conscionable the opening of what’s to travel for the crypto industry. He noted:

“This is conscionable the commencement of the plus income from BlockFi and different crypto firms successful Chapter 11 bankruptcy successful the US.”

Cointelegraph reached retired to BlockFi for remark but did not person a effect by the clip of publication.

BlockFi’s effort to liquidate its loans is apt portion of efforts to wage disconnected its creditors, which according to its bankruptcy filing successful Nov. 2022, the institution has implicit 100,000 creditors.

At the clip of its bankruptcy, it was reported that BlockFi sold $239 cardinal of its ain cryptocurrency assets to screen the bankruptcy expenses and warned astir 70% of its unit that they would suffer their jobs.

Related: BlockFi bankruptcy filing triggers a wide scope of assemblage reactions

Earlier this week, BlockFi petitioned the tribunal successful a Jan. 23 declaration to merchandise funds to let bonuses for cardinal employees successful a bid to clasp them amid the Chapter 11 bankruptcy proceedings.

BlockFi’s main radical serviceman Megan Crowell told the tribunal that without fiscal incentives, it’s improbable the institution volition beryllium capable to clasp its employees.

Crowell said it is highly apt galore unit volition permission the institution without competitory compensation, noting that it would adhd further fiscal interaction to the institution down the road.