Judge Agrees to BlockFi’s Request to Allow it to Give $9.98M Bonus to Its Employees to Retain Talent

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According to a document dated January 27, 2019, New Jersey Bankruptcy Court Judge Michael Kaplan allowed (1) petition by cryptocurrency lender BlockFi to pay its employees up to $10 million as part of a “retention plan.”

As we had reported Earlier, BlockFi had sought permission to give bonuses to its employees to prevent them from leaving the company. According to the court filing, BlockFi can pay its employees $9.98 million in three equal installments over a year.

The payment to the insolvent company is divided into two tiers: the first tier pays employees 42.5% of their basic salary and the second tier pays 9% of their basic salary.

Meanwhile, the document submitted to the court did not include any information on the number of workers eligible for the bonus, nor did it contain any information regarding the requirements for any tiers. According to various reports in the media, 130 people are currently working in this company.

The reason why a bankrupt company still wants to pay bonuses to its employees
Earlier, the crypto lending company, which declared bankruptcy, said it was necessary to pay bonuses to its employees to continue benefiting from their services throughout the bankruptcy proceedings.

According to Megan Crowell, who serves as chief people officer at BlockFi, there was fierce competition for talent, and the company’s employees had “plenty of opportunities both inside and outside of the cryptocurrency business.”

BlockFi’s unsecured lenders, on the other hand, said the proposed incentives were “broader and more expensive than previous crypto events.”

In a separate development, other defunct cryptocurrency firms such as Celsius and Voyager have also requested employee retention programs for their employees. Both the companies said the money would help them retain the services of the rare skills provided by their employees and it would be an advantage for them.

More information regarding BlockFi’s Chapter 11 filing

Recent financial filings show that BlackFi owed $1.2 billion to crypto firms FTX and Alameda Research, both of which went bankrupt.

The bankruptcy filing for the lender showed FTX had $415.9 million in assets and owed $831.3 million to Alameda. Additionally, the company had 662,427 customers, and more than 70 percent had balances of less than $1,000.

Additionally, a story published by Bloomberg on Jan. 23 said the lender intended to sell $160 million in debt tied to 68,000 pieces of mining equipment.

The lender’s business, along with other miners, took a significant hit in 2022 when the price of Bitcoin hit an all-time low.

In addition, the lender asserted ownership over Sam Bankman—who shared Robinhood fries before the company was seized by US authorities. According to the lender, the shares were used as collateral for a loan the lender made to Alameda.


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