BlockFi Attempts To Dispose Of $160 Million In Loans Secured By Bitcoin Miners

Companies are increasingly liquidating their properties to either pay off creditors or stay out of bankruptcy as a result of the industry's high number of bankruptcies. According to today's news, the insolvent cryptocurrency lending company BlockFi plans to sell $160 million worth of loans secured by around 68,000 Bitcoin mining rigs.

According to two “familiar with the situation” sources cited by Bloomberg earlier today, BlockFi began the auction of the debts last year as part of the insolvency procedures.

Nevertheless, considering the drop in the market rate of Bitcoin mining equipment, some of the mortgages appear to be under collateralized and have already fallen into delinquency, according to the source. In addition, January 24 has been set as the timeframe for buyers to make their offers.

The debt is anticipated to be “all that the administrators” for BlockFi can retrieve for these investments, according to cryptocurrency lawyer Harrison Dell, director of the Australian law firm Cadena Legal, who told news outlet Cointelegraph that the people able to bid on the outstanding debt are probable to be debt recovery companies purchasing for “cents on the dollar.”

Bankruptcy Proceedings with BlockFi

The crypto lending company, BlockFi, filed for chapter 11 bankruptcy in the U.S. following the shockwaves triggered by the failure of Three Arrows Capital's investment firm, the FTX bankruptcy, and the crypto winter that resulted in low BTC prices. District of New Jersey cited the FTX vulnerability in November of last year.

The news broke when the cryptocurrency market was suffering from numerous unfavorable news effects. BlockFi claims that the liquidity situation was created by its exposure to FTX through loans to Alameda and its cryptocurrency holdings on FTX's network that got stuck there. According to BlockFi, its assets and liabilities range from $1 billion to $10 billion.

The United States was among the creditors the corporation identified. SEC, has a $30 million budget. Securities and Exchange Commission. According to Bitcoinist, the Company owes the SEC this sum as a result of a case in which BlockFi was required to pay the agency more than $100 million.

Since the repercussions from FTX, BlockFi is not the only cryptocurrency company to have declared bankruptcy. Core Scientific, a bitcoin mining company, and Genesis, a cryptocurrency lender, have both been added to the list of insolvent businesses.

More than 5 distinct cryptocurrency businesses, including Terraform Labs, Celsius Network, Voyager Digital, Three Arrows Capital (3AC), and FTX, have declared bankruptcy in the past year.

The cryptocurrency market has remained unaffected, despite reports that indicate that crypto-related businesses are still having trouble. After months of negative trends, the global crypto market capitalisation last week reclaimed the $1 trillion barrier.

As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!

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