BlockFi, a now-defunct cryptocurrency lending company, intends to liquidate debts amounting to approximately $160million that were guaranteed by 68,000 Bitcoin mining machines. This is part of its bankruptcy protection process. These debts can be backed by Bitcoin mining machines.
Bloomberg published a report on January 24 that stated that two people, who were described as “familiar with this matter”, indicated that BlockFi started the process of getting rid the debts the year before. This information was included in the article.
The petition was submitted by the cryptocurrency lender for protection against creditors under Chapter 11 US Code in November. The lending company’s failure was at least partially due to its large exposure to FTX, a cryptocurrency exchange that has since closed.
The sources say that some of the loans have been defaulted upon since then and that, due to the drop in the price Bitcoin mining hardware, it is possible they are undercollateralized. According to reports, potential loan applicants have until midnight on the 24th January to submit their application for the financing currently available.
Dell stated that the fact that debt collection agencies purchased loans for “cents per dollar” indicated that these agencies were likely to be involved in the bidding process. The bidding process for the loans was described as “cents-on-the dollar.”
Additionally, he stated that BlockFi administrators were likely capable of collecting “nothing” other than cash from these assets. This was in reference the debt they owed.