BlockFi receives court approval to sell its crypto mining equipment

The decision followed a court order filed on 30 January 2023 in the United States Bankruptcy Court for the District of New Jersey, which allowed BlockFi to sell the assets in order to improve the company’s chances of recovering lost capital. 

According to cointelegraph.com, the court’s decision will result in an increased number of bids for BlockFi’s crypto mining assets. It’s also worth noting that all qualifying bids should be sent to specified parties by 20 February 2023 and should be filed with the court by 2 March 2023. Furthermore, the creditor’s representatives have until 16 March to object to the sale of the assets to the qualified bidders.

How can someone participate in the bidding process? 

In order to submit a bid, interested parties should deliver a written proposal to each of the co-counsel to the debtors. The proposal should include several details, including the assets in question, the proposed price, and a means to finance the assets. 

According to BlockFi representatives cited by cointelegraph.com the company has already received interest from bidders for various assets. The same source indicates that BlockFi aims to receive as many bids as possible in order to take advantage of current market conditions, particularly in the context of recent cryptocurrency rallies.

More details about BlockFi’s bankruptcy

In November 2022, BlockFi has filed for Chapter 11 bankruptcy protection due to a liquidity crisis caused by its proximity to FTX. BlockFi conducted business with FTX by issuing loans to crypto trading firm Alameda, and it also held cryptocurrencies on FTX’s platform. 

According to decrypt.com, BlockFi took a USD 400 million line of credit from FTX US in the summer of 2022, and it also received USD 850 million in two funding rounds in 2021. BlockFi representatives cited by fintechnews.ch revealed that the management team and board of directors immediately took action to protect clients and the company following the collapse of FTX. The company also denied that a majority of its assets were tied up in FTX but admitted to significant exposure to FTX and associated corporate entities. 

Earlier in 2022, BlockFi was directly affected by the downturn of the crypto market and had to fire around 20% of its workforce in a decision that affected 170 employees. The company also struck a deal with crypto exchange FTX that involved laying out terms for a potential acquisition by FTX.