BlockFi Inc, an embattled digital asset lender has announced its plans to sell off loans valued at $160 million. The loans backed by approximately 160,000 bitcoin mining machines have been offered for bidding according to reports from Bloomberg.
BlockFi intends to liquidate its loans in order to raise funds to repay its investors. Recall that the crypto lender declared bankruptcy in November, citing its exposure to FTX as the source of its liquidity issues.
While BlockFi’s intentions may be good, some loans appear to have defaulted. In addition, the value of the collateral used to obtain these loans has dropped significantly based on the decline in the price of bitcoin mining equipment.
Meanwhile, the crypto lender has submitted a motion in court to give its users access to their locked funds. This was after its filed document revealed that the lending platform owes its users about $10 billion to more than 100,000 creditors.
BlockFi hinted that users who deposited funds after withdrawals were halted would be able to withdraw those funds if the court granted the petition.
Cascading Effect of the Crypto Bear Market
The ongoing crypto bear market has brought about a reduction in trading volume, a reduction in the value of Bitcoin, and a reduction in the number of new investors entering the market.
Furthermore, businesses and projects built on top of specific crypto have been negatively impacted by the bear market. Some public Bitcoin miners have also been reported to have shut down their machines. A report from Insidecrypto revealed that public Bitcoin miners sold nearly all of their Bitcoins mined in 2022.
In the wake of the ongoing realities, Celsius’ crypto mining arm has announced plans to sell a set of mining equipment. The brand-new MicroBT ASIC Rigs were sold at $1.3 million to the highest bidder, Touzi Capital LLC.
Touzi Capital will be in charge of making all arrangements and payments related to the removal and shipping of the machines, according to the sales agreement.
In a similar situation, Bitcoin miner, Core Scientific eventually filed for bankruptcy protection after experiencing financial difficulties. The firm said it had to file for bankruptcy due to the low prices of bitcoin and the decrease in the firm’s revenue.
Core Scientific stated that its positive cash flow was not sufficient to pay for the high cost of power and mining machines.
