- New Jersey bankruptcy court approves auction of crypto mining assets for BlockFi.
- Petrie, BlockFi’s lawyer, necessitates expedient response to make most of crypto market conditions.
- BlockFi intends to sell assets to repay creditors and as a part of the restructuring process.
BlockFi, the crypto assets lender, received approval from the New Jersey bankruptcy court to put up its cryptocurrency mining assets for auction. It seeks to “act quickly” as suitors are seeking to buy all or part of the company.
Soon after the failure of Bankman-Fried’s FTX, the crypto financial service provider, BlockFi, had declared bankruptcy. According to Bloomberg, bankruptcy Judge, Michael Kaplan, approved their claim and allowed the crypto mining company to start auctioning their crypto mining assets.
As per recent observations made on Glassnode, Bitcoin’s price rose from under $17,000 to above $23,000 in January, making the crypto market volatile and a perfect time to sell crypto mining assets.
Necessitating an expedient response to take advantage of the current crypto market conditions, BlockFi’s lawyer, Francis Petrie stated:
We’ve received substantial interest in the market for bidding purposes and current volatility in the cryptocurrency market, which means we need to act quickly.
BlockFi intends to sell its mining equipment as part of its restructuring process, with saleable assets including its ASICs that are computer hardware specifically designed to mine Bitcoin in a cost-effective manner.
BlockFi had approached 106 potential buyers and was getting suitors to buy all or part of the company making initial bids for various assets, and expects more. By February 20, it aims to receive buyer bids and complete the auction a week later. It will then present the motion of sale for any deal it reaches before the court by March 1.
BlockFi said its assets and liabilities ranged from $1 billion to $10 billion, owing money to more than 100,000 creditors. Court documents show that BlockFi owes FTX $275 million, making it BlockFi’s second-largest creditor.
Even before FTX went belly up, BlockFi was struggling. This was handled with a $400 million line credit that FTX offered to BlockFi. The collapse of FTX and the crash in cryptocurrency prices in the aftermath caused a liquidity crunch for BlockFi.
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