Embattled crypto lending platform BlockFi is reportedly selling off loans linked to the purchase of bitcoin mining equipment. The company, which filed for Chapter 11 Bankruptcy protection in November, is aiming to sell loans worth $160 million backed by 68,000 bitcoin mining rigs, Bloomberg reported.
The company had begun the process to sell these loans, some of which have defaulted and are undercollateralized given the decline of BTC mining hardware. The deadline to submit bids is January 24, the media coverage said quoting unnamed sources.
For the Crypto mining industry, a string of factors from high energy prices, to competition and high hash rates worked against it throughout 2022. During the bull run of 2021, BlockFi had lent to the bitcoin mining industry to the tune of $4 billion. Several other lending platforms including Celsius Network and Galaxy Digital had also lent heavily to the crypto mining industry.
This latest move appears to be an effort to raise cash to stay afloat and pay off debt. It is not clear as of now how much of the $160 million will be used to pay off BlockFi’s debt, but some of the money will likely be used to keep the company afloat.
BlockFi is not the first company to sell its mining hardware loans. Earlier this year, mining giant Bitmain sold $1.1 billion of its mining loans to undisclosed buyers.