Crypto Regulation

BlockFi gets court approval to liquidate its crypto mining equipment

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Troubled digital asset lender BlockFi received court approval to sell its crypto mining equipment to raise funds to pay off creditors.

BlockFi in hot pursuit of mining equipment bids

The United States Bankruptcy Court of New Jersey has granted the defunct crypto lending platform BlockFi approval to sell off its mining equipment. According to documents filed on Jan. 30, the court’s approval allowed BlockFi’s liquidation to raise more funds to pay off creditors. The court’s approval is expected to spark a series of bids, especially with the current market conditions.

It is presumed that BlockFi is rushing to get as many competitive bids as possible to take advantage of the rally in crypto prices. According to the filing, all liquidation requests must be sent to the relevant parties highlighted in the bidding process by Feb. 20. The proposals would then be filed with the court on or before Mar. 2.

The bidding process will dictate a written proposal from all interested parties to the debtors’ co-counsel, including the desired purchase price and specific assets to purchase. Francis Petrie, BlockFi’s attorney, notified the New Jersey court that the firm had started to receive bids and that more were expected to follow as we near the deadline.

BlockFi’s downfall was heavily linked to FTX’s collapse

BlockFi filed for Chapter 11 bankruptcy protection against creditors in November after being exposed to the already collapsed FTX. BlockFi’s leaked financial books indicate that the firm had more than $1.2 billion in FTX and sister company Alameda Research. The leaked documents reveal that the crypto lender had loose ties worth $415.9 million with the FTX exchange and more than $831 million on Alameda Research.

Efforts to remain afloat saw Blockfi in court suing FTX’s founder and former CEO Sam Bankman Fried over Robinhood shares he had issued as collateral for funds handed over to him by BlockFi. According to reports that surfaced on the internet, the stakes were to be given as collateral to BlockFi days before the unexpected horror befell FTX, its subsidiaries, and affiliated companies.

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