• BlockFi plans to liquidate approximately $160 million in loans backed by approximately 68,000 Bitcoin mining machines.
• The move is aligned with on-chain data that indicates crypto miners are selling both freshly minted Bitcoins and old coins to offset negative balance sheets.
• Crypto lawyer Harrison Dell notes that this is the beginning of more troubles in the industry set to unfold in 2023.
Troubled crypto firm BlockFi is facing mounting financial difficulties, with plans to liquidate approximately $160 million in loans backed by approximately 68,000 Bitcoin mining machines. This move comes as on-chain data indicates that crypto miners are selling both freshly minted Bitcoins and old coins in an effort to offset negative balance sheets.
The process of bidding for the debts began last year and is due to end soon, with creditors likely to receive only a fraction of what they are owed. Crypto lawyer Harrison Dell, Director at Australian law firm Cadena Legal, has commented on the situation and believes that this is the start of more troubles for the industry that will unfold in 2023.
BlockFi had previously been looking to secure a share from the $465 million in SBF’s Robinhood stake that the DoJ anticipates seizing as proceeds of fraud, but due to the current financial situation, these funds may not be sufficient to cover the losses. The increased liquidations of assets could further increase the overall sell pressure in Bitcoin and crypto prices, leading to further losses for the company.
BlockFi’s current troubles are a reminder to all investors in the crypto space to be mindful of the risks associated with investing in crypto and to always do thorough research into any company or investment before committing funds. Moreover, investors should ensure that they have a clear understanding of the terms and conditions of any investment they make, and should be prepared to take losses if necessary.