Bankrupt BlockFi plans to sell $160M Bitcoin mining hardware loans

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  • BlockFi filed for Chapter 11 bankruptcy in November 2022, citing risks from the recent collapse of FTX.
  • The plan to sell off loans backed by bitcoin miners is part of bankruptcy proceedings.
  • Bidders have until the end of January to submit proposals.

about two months later BlockFi filed for Chapter 11 bankruptcyAs part of bankruptcy legal proceedings, the crypto lender now plans to sell $160 million in loans backed by bitcoin mining hardware. In total, the loan is backed by approximately 68,000 bitcoin miners.

Although BlockFi cited exposure to FTX as the main reason for its bankruptcy, the crypto lender has announced Cut your workforce by 20% Citing a fall in crypto prices in June 2022. Reports emerged days after the layoffs were announced that the lender was In talks to raise funding at $5 billion valuation,

Bidders have time till January 24 to send proposals

According to report from bloombergLast year, BlockFi began the process of selling loans backed by bitcoin mining hardware. It is believed that some of the said loans have already defaulted and are candidates for under-collateralization following a sharp drop in bitcoin mining hardware prices.

In an interview with a popular media outlet, crypto attorney Harrison Dale, who is a director at Australian law firm Cadena Legal, said that if bitcoin mining equipment is worth less than the value of the collateral, the loans to BlockFi will be worth their paper value. are not worth. Loan.

Those bidding for the loans are most likely debt collection businesses, according to Harrison Dale, who is saying that selling loans is all that BlockFi can do at this point.

It is believed that BlockFi’s attempt to sell off its loans is likely part of the lender’s efforts to repay its creditors, which number around 100,000 in total.

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