US Bankruptcy Court Grants Approval for Sale of BlockFi’s $4.7 Million in Assets
BlockFi, a cryptocurrency asset lending platform that filed for bankruptcy in November last year, has received approval from a New Jersey bankruptcy court to sell its assets to US Farms for approximately $4.7 million. The sale includes BlockFi’s coin miners.
Voluntary bankruptcy, under Section 11 of the U.S. Bankruptcy Act, is a method for companies to rebuild by reducing their debts while continuing business operations. In this case, BlockFi is selling its assets to maximize recovery for its creditors during its voluntary bankruptcy proceedings.
The sale of BlockFi’s assets, including the mining machines, was approved by the bankruptcy court on January 30, 2023. The court deemed the sale plan fair, reasonable, and appropriate to recover the business and maximize the realizable value for the company.
BlockFi has put up a total of 68,000 bitcoin miners as guarantees for the bond, and there is a possibility that the drop in mining machine prices may lead to a lack of collateral for BitFi creditors.
BlockFi is currently in the process of selling loans worth $155 million. However, the company has temporarily suspended its proceedings until the criminal case of Sam Bankman Fried, former CEO of FTX, is concluded. The US prosecutors are concerned that a Robinhood stock ownership lawsuit could impact the criminal proceedings against SBF.
BlockFi’s decision to sell its assets and restructure its debts through voluntary bankruptcy reflects the challenges that cryptocurrency companies face in the current economic climate. The volatility of digital assets can lead to a lack of collateral, and companies must navigate the legal and financial complexities of the industry to remain viable.
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