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Bankrupt BlockFi Has been Permitted to Sell off Its Mining Business; auctions are to Happen Soon

At a recent video court session, BlockFi attorney Francis Petrie explained that the company had already gotten some early offers for various assets.

Image Credit: Forbes (1.1)

BlockFi, a company that provides loan services for digital assets, has won authority from a bankruptcy court to hold an auction for its crypto currency mining operation. Reports indicate (1) that the corporation intends to solicit offers as early as possible to capitalize on the existing market circumstances.

Moreover, at a recent video court session, BlockFi attorney Francis Petrie explained that the company had already gotten some early offers for various assets. Petrie was explaining this fact to the judge. Petrie made these statements before the United States Bankruptcy Judge Michael Kaplan:

"Due to the high level of interest, we've received in the market for bidding reasons and the ongoing volatility of the crypto currency market, we need to hurry."

BlockFi is considering holding an online auction to sell computer hardware for digital mining currency. Following a decrease in the cost of power, the cryptocurrency mining industry is now experiencing a period of expansion.

As a result of this encouraging turn of events, another defunct crypto currency site, Celsius Network, plans to unload many of its computers. A similar announcement regarding BlockFi was made by the crypto currency loan company situated in New Jersey last week.

According to Petrie, the deadline for offers for BlockFi's mining assets is the 20th of February. In addition, the corporation's legal representative mentioned that bidding would take place in around one week.

Last but not least, BlockFi may have to go back to court in March to get clearance for any potential acquisitions resulting from the auction.

BlockFi Recently Filed for bankruptcy

In the wake of the FTX collapse, BlockFi submitted its bankruptcy petition in November of last year. The corporation, which had extensive and well-established financial relationships with FTX, planned to sell or reorganize its operations once it declared bankruptcy.

This reorganization aimed to create sufficient revenue to satisfy the obligations owed to creditors. Petrie said in front of the court that if any of BlockFi's assets were not sold at auction, the company would reorganize them as part of a larger plan to emerge from bankruptcy.

BlockFi said it had around 257 million dollars in cash when it filed for bankruptcy, which it intended to use to help itself. On the other hand, the troubled company owed more than 100,000 different creditors and had assets and liabilities totaling $10 billion.

The bankruptcy petition BlockFi submitted in November showed, among other things, that the business owes the Securities and Exchange Commission $30 million (SEC). In addition, it owed $275 million to West Realm Shires and an extra $729 million to the Ankura Trust Company, its primary creditor.

When the bankruptcy petition was being prepared, a financial counsel to Valar Ventures, which owns a portion of BlockFi, stated:

"Ever since the company was founded, BlockFi has been actively contributing to the growth and development of the crypto currency industry. BlockFi is looking forward to an open and honest process that will result in the greatest possible conclusion for all its customers and the other stakeholders."

BlockFi was a significant source of financing for Bitcoin (BTC) miners, who struggled mightily in 2018 due to severe macroeconomic restraints. Through loans secured by computer rigs, the company was a significant source of financing for Bitcoin miners.

On the other hand, Celsius's attorneys recently stated that the profitability of Bitcoin mining is on the increase because of the decrease in the cost of power.

The United States Bankruptcy Circuit for the District of New Jersey is now hearing the bankruptcy case involving BlockFi.