BlockFi Raises Almost $5 Million By Selling Mining Assets

Key Points:

• BlockFi has been granted permission by the bankruptcy court to sell its crypto-mining assets and other tangible assets in order to generate around $4.7 million.
• According to the company’s lawyers, the assets were sold to a group named USFarms.
• The company was apparently attempting to sell $160 million in mining loans in January.

The sale of mining equipment and other physical assets by BlockFi, a crypto asset lending firm in bankruptcy proceedings, was permitted by a US bankruptcy court for $4.7 million.

According to a report by The Block, BlockFi’s lawyer said that a portion of the assets would be sold to a company named US Farms after an auction in which there was a lot of interest in the actual equipment that would be disposed of.

According to the firm, there were five offers for the complete set of mining assets and seven bids for a part of the assets prior to the purchase decision.

In November 2022, BlockFi filed for Chapter 11 bankruptcy in the United States Bankruptcy Court. A Chapter 11 bankruptcy is a corporate reorganization effort that minimizes debt while the company continues to function. To maximize the recovery of creditors’ assets, the property of a bankrupt corporation may be sold to a third party and divided among creditors.

It is worth mentioning that the corporation gained permission to hold the aforementioned auction at the end of January. At the time, BlockFi’s lawyer said that they wanted to do this as quickly as possible to capitalize on the current demand among enterprises and mining services to obtain their high-end equipment.

While accounting for a modest fraction of the firm’s overall revenue, BlockFi was one of the largest lenders in the bitcoin mining market.

According to Bloomberg, the company was attempting to sell $160 million in mining loans. Since many of them were backed by ASIC machines, the prices of which have plummeted in the previous year, the loans may now be under-collateralized.

Let us recall that the United States has implemented a pretty sharp policy on crypto mining operations, encouraging the use of renewable energy and attempting to reduce the carbon footprint that they typically create.

BlockFi gained authorization from the New Jersey bankruptcy court on January 30 to sell its mining equipment and other assets. The court determined that the transaction was fair, reasonable, and suitable in terms of restoring the company and maximizing realizable value.

BlockFi is one of the customers whose accounts are not FDIC-insured at Silicon Valley Bank and are not guaranteed by the bank, according to SVB’s balance summary statement.

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Harold

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