According to reports, the insolvent cryptocurrency lending company BlockFi intends to auction off over 68,000 Bitcoin mining equipment as collateral for debts totaling around 160 million dollars as part of its bankruptcy procedures.
A chapter 11 bankruptcy petition was submitted by the cryptocurrency lender around two months ago, alleging exposure to the now-defunct FTX. BlockFi began selling out the Bitcoin mining equipment loans in the middle of last year.
Some of these loans have gone into default since then; others may be undercollateralized due to the fall in Bitcoin mining hardware prices; and the deadline for interested parties to enter bids on the loans is today, January 24.
It was revealed that at the time of its bankruptcy that BlockFi sold $239 million worth of its own cryptocurrency holdings to fund the liabilities associated with the bankruptcy, and it told around 70% of its workforce that they’d lose their jobs as a result.
At the time Megan Crowell, the chief people officer of BlockFi, said in front of the court that if the firm does not provide financial incentives to its workers, it is very improbable that the company would be able to keep the personnel.
As stated in the court petition, the firm has more than 100,000 creditors, thus the lender’s efforts to liquidate its debts are likely an effort to pay them off. Due to the fall in crypto markets and drop in BTC price, as well as increased expenses of operations, particularly electricity costs, the bitcoin mining industry has been struggling for some time.
Due to the extreme volatility of the cryptocurrency market, conventional bankers stayed away from the floundering mining business, but companies like BlockFi stepped in to provide finance.