Distressed crypto lender BlockFi can take advantage of favorable market conditions to auction off mining assets, a US bankruptcy judge rules.
BlockFi’s assets have garnered significant interest in the crypto market VolatilityAn immediate response is needed, BlockFi attorney Francis Petrie told bankruptcy judge Michael Kaplan.
BlockFi wants to use surge in mining
According to Petrie, interested parties can bid on the property until February 20, 2023, and the auction will be held approximately one week later. BlockFi will seek court approval to auction any material from the auction. Any assets that don’t attract successful bids will be part of the company’s restructuring plans for a quick exit from bankruptcy, Petrie said. was added.
A week after the auction plans came for BlockFi said It will sell $160 million in loans as collateral Bitcoin Mining equipment as part of current Chapter 11 Bankruptcy activities. It then reportedly sold its own crypto assets for $239 million Filing For bankruptcy in November 2022.
The auction comes at a time when the mining industry is booming, despite the recent rally in bitcoin’s price since early 2023. Miners can be seen bringing more machines online.
Foundry is leading a global hashrate renaissance
Mining companies borrowed heavily to finance expansion during the bull markets of 2017 and 2022. However, falling bitcoin prices and rising energy costs have squeezed the cash flow needed to service those loans. As a result, many heavily indebted crypto companies have sold their mining equipment or defaulted on debt.
New York-based digital currency group Greenidge has bought mining rigs from Generation Holdings. By comparison, Sydney-based miner Iris Energy halted a significant portion of its mining operations as part of a $108 million debt default. Mining giant Core Scientific recently shut down rigs owned by bankrupt lender Celsius after the lender failed to pay rising energy costs related to a hosting contract. Others, such as Stronghold Digital Mining, have extinguished debt by converting revised notes to equity.
Despite the surrender, the mining hashrate has risen to approximately 290 exahashes per second, according to Blockchain.com. Most of the mining power last week came from the world’s largest mining pools Foundry America, AntPoolAnd F2Pool, which is 64% of the current global hashrate. A mining pool consists of a group of miners who earn revenue based on their contribution to the pool’s hashrate, regardless of whether the pool checks the Bitcoin transaction block.
According to Mempool’s data, only Foundry USA is responsible for 90 exahashes per second, with Antpool coming in second at 47.1 exahashes per second. Foundry is part of Digital Currency Group, a blue-chip crypto firm whose subsidiaries include bankrupt lender Genesis Global Capital and digital asset manager Grayscale Investments.
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