BlockFi Inc. was granted permission by the bankruptcy court to hold an auction for the cryptocurrency lender’s mining operation.
During a Monday morning video court hearing, BlockFi attorney Francis Petrie stated that the company intends to submit bids as soon as possible to benefit from the current market circumstances. Petrie informed US Bankruptcy Judge Michael Kaplan that the company has already received some preliminary bids for certain assets and anticipates more.
“We’ve received substantial interest in the market for bidding purposes and current volatility in the cryptocurrency market, which means we need to act quickly,” Petrie said.
At a time when the cryptocurrency mining industry is expanding, BlockFi is offering computer equipment used for mining digital money. Another failed cryptocurrency network, Celsius Network, said last week that it planned to sell tens of thousands of mining rigs.
The deadline for bids for the mining assets is February 20, and an auction will be placed around a week later, according to Petrie. Any proposed purchase that results from the auction will need to be approved by the court when the business returns in March.
BlockFi, a Jersey City, New Jersey-based company, filed for bankruptcy in November with the intention of repaying its debts by either selling the company or reorganizing it. According to Petrie, any assets the business doesn’t put up for auction would be reworked as part of a plan to emerge from bankruptcy.
Through loans secured by the computer rigs, BlockFi was a significant financier for Bitcoin miners, who were hurt by low pricing and skyrocketing electricity costs last year. Profitability has increased recently as power costs have decreased, Celsius’ attorneys claimed in a court proceeding last week.
An increasing market for distressed assets has been established by struggling Bitcoin miners and insolvent lenders. Jihan Wu, a Chinese billionaire, has backed the cryptocurrency mining company Bitdeer, which has established a $250 million distressed fund. Grayscale, the largest digital asset manager, has established an entity to invest in Bitcoin mining equipment alongside its sister company Foundry to take advantage of the struggling mining industry.
