That’s it, crypto lending platform BlockFi can auction off its mining hardware. This is the verdict handed down by Michael Kaplan, the US bankruptcy judge in charge of the case. This decision comes at a time when the lender’s assets are attracting considerable interest in view of the volatility of the crypto market. Moreover, it is also a lifeline for the distressed lender who can now exploit the favorable market conditions to improve its lackluster situation since November 2022.
Finally a way out for BlockFi?
Francis Petrielawyer for BlockFiannounce the imminent sale of mining equipment of the bankrupt crypto lender. It clarifies that parties interested in buying BlockFi’s mining assets will have to bid before the February 23, 2023. The auction will not take place until a week later under court approval. Finally, any asset that will not be the subject of any offer will be retained in the company restructuring plan to quickly emerge from the crisis.
Mining companies took out huge loans for their expansion during the bull market period of 2017 and 2022. However, there are several reasons for their inability to settle their debts. In particular the fall in Bitcoin prices and the rising energy costs which have considerably reduced the liquidity required. This forced several mining companies to sell their equipment to repay the loans.
Unfortunately, lender BlockFi was no exception. Indeed, within the framework of the Chapter 11 bankruptcy proceeding underway, BlockFi has announced that it will sell $160 million in Bitcoin-backed loans. It reportedly sold exactly $239 million of its own crypto assets after filing for bankruptcy in November 2022.
Likewise, the auction plans come at a time when the mining industry is experiencing growing prosperity, punctuated by the recent surge in the price of Bitcoin. This growth has stimulated the income of miners who have not hesitated to put more machines online.
Since its chaotic balance sheet in November 2022, crypto lender BlockFi has been on a downward spiral. Indeed, the fall in the price of Bitcoin accentuated by the increase in energy costs contributed greatly to its bankruptcy. However, a way out opens to him with the authorization to sell his mining assets to the highest bidder. However, it is still unclear if this will be enough for BlockFi customers to get their cryptos back..
Receive a digest of news in the world of cryptocurrencies by subscribing to our new service ofdaily and weekly so you don’t miss any of the essential Tremplin.io!