• BlockFi, a bankrupt crypto-lending firm, is selling $160 million in loans backed by 68,000 Bitcoin mining equipment.
• The process of selling off the loans began last year and the deadline for those bidding to submit loan offers is 24 January.
• The sale of the debt is all that the current BlockFi administrators can salvage for these assets, after exhausting all other possibilities.
BlockFi, a crypto-lending firm, is attempting to liquidate $160 million worth of loans backed by 68,000 Bitcoin mining equipment. The effort to sell off the loans is most likely a result of its attempts to pay off its creditors after declaring Chapter 11 bankruptcy in November last year.
The process of selling off the loans began last year and those bidding to purchase them have until 24 January to submit loan offers. If the mining equipment used as collateral is worth less than the loan value, then the loans are no longer worth their paper value; in this case, those bidding on the debts are most likely debt collection agencies looking to buy pennies on the dollar.
At the time of its bankruptcy, BlockFi sold $239 million of its own cryptocurrency assets to cover bankruptcy expenses and warned that approximately 70% of its employees would be laid off. The sale of the debt is all that the current BlockFi administrators can salvage for these assets, after exhausting all other possibilities.
The bankruptcy of BlockFi has been blamed on its significant exposure to the now-defunct crypto exchange FTX. The company had over 100,000 creditors per its bankruptcy filing in November 2022. The liquidation of BlockFi’s loans is an attempt to pay off those creditors and stabilize the company’s financial situation.
The bankrupt crypto lending firm is hoping to get the highest possible return for its loans. Those interested in purchasing BlockFi’s loans have until 24 January to submit loan offers. The sale of the debt is all that the current BlockFi administrators can salvage for these assets, after exhausting all other possibilities.