News

Bitfarms Looking To Avoid Default On BlockFi’s $20 Million Loan

Key Points:

  • As the value of the equipment declines, Bitfarms is attempting to restructure a loan with BlockFi in order to prevent default.
  • Only $5 million worth of assets, including some mining equipment and the Bitcoin they generate, are used to secure the $20 million in outstanding debt owed by the BlockFi.
  • The miner has been making an effort to pay off its debt, but there are still $47 million in unpaid loans, including the loan with BlockFi.
Bitcoin miner Bitfarms may have stopped paying installment payments on a loan from insolvent cryptocurrency lender BlockFi already or may do so in the future, thus defaulting on the loan, the company warned in a news release on Friday. Bitfarms is attempting to restructure the loan as a result.

Backbone Mining Solutions from Bitfarms signed a $32 million equipment financing agreement with BlockFi last year. The 20-megawatt active crypto mining facility owned by Bitfarms in Washington state is run by BMS.

The outstanding principal and interest on the loan, which totals nearly $20 million, is secured by certain BMS assets with a market value of around $5 million. As a result, the miner is exploring loans with better terms and lowering its commitments.

Bitfarms CFO Jeff Lucas said in a statement:

“During 2022, Bitfarms began taking proactive actions to increase financial flexibility and to reduce indebtedness and capital expenditures.”

The company is various to make the $36 million cash and unencumber crypto assets Bitfarms and its subsidiaries held as December liquidity enough to maintain ongoing operations for the foreseeable future and future loan agreements.

The Canadian company Bitfarms has been attempting to pay down its debt, but there are still $47 million in unpaid loans, including the one with BlockFi.

After miners went on a spending binge when Bitcoin reached record highs in 2021, the value of mining equipment fell. However, mining has become a far less profitable endeavor as cryptocurrency prices have fallen and energy costs increased, and miners globally are battling to survive.

The value of miners’ crypto assets and mining equipment has decreased. Compute North and Core Scientific, two of the major companies in the sector, have requested Chapter 11 bankruptcy protection. Argo Blockchain is also struggling financially.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Harold

Coincu News

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.

Recent Posts

DOJ Investigates Polymarket for Alleged Illegal US User Bets

The US DOJ investigates Polymarket for Alleged Illegal US User Bets Polymarket, for allegedly permitting…

56 minutes ago

Get Ready for a New Level of Excitement If You Missed Ethereum ICO: Qubetics Could Redefine Success

Ethereum’s ICO was priced at around $0.30 per token, and today, it’s valued in the…

1 hour ago

A Missed Moment with Cardano? Here’s Why Qubetics at $0.0212 Could Be Your Perfect Timing – Explore the Best Crypto to Join Now

If you’ve been regretting missing out on Cardano, Qubetics ($TICS) might just be the ticket…

2 hours ago

Shiba Inu Price Clears Path To New ATH Of $2 As WallitIQ (WLTQ) Takes The Lead With A 23,000% Surge

The Shiba Inu price is on track to reach a new ATH of $2, while…

2 hours ago

Best Crypto Presales to Watch This November: Get in Early on These Potential Breakout Coins

So, you’re on the lookout for the next big thing in crypto? Aren’t we all?…

6 hours ago

This website uses cookies.