BlockFi permitted to pay $10M in staff bonuses in spite of bankruptcy

According to a Jan. 27 filing, bankrupt crypto lending startup BlockFi has been granted court authority to pay roughly $10 million in staff bonuses.

The term “bonus” is not used in the file. Instead, it refers to an employee retention program and describes additional incentives above and above base pay.

BlockFi will pay up to $9.98 million to a few remaining employees under the program. Employees will receive the money in three installments. There will be two payment tiers: one that pays employees 42.5% of their basic income and one that pays employees 9% of their base salary.

According to today's filing, BlockFi has been “allowed, but not instructed” to implement this staff retention program. Though the company does not appear to be obligated to pay all or any of its employees, if it decides to proceed with the retention plan, it must execute the last of the three installments within 12 months of court approval.

The number of employees eligible for the incentive was not specified in the court filing. According to recent sources, the firm currently employs around 125 people.

BlockFi initially justified its request by claiming that due to fierce competition, its staff would most certainly be hired elsewhere. According to statements from BlockFi's legal counsel, the firm's workers play a vital role in restoring funds to investors.

Because customer withdrawals have not yet been fully resumed, BlockFi's move to pay its employees will likely be controversial. In December, the business began taking legal steps to reopen necessary wallet withdrawals while closing interest-bearing wallets. Regardless, as of Jan. 27, all wallets appear to be frozen.

The bankruptcy proceedings for BlockFi are being handled by the United States Bankruptcy Court for the District of New Jersey. Judge Michael Kaplan is in charge of the case.

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