• BlockFi plans to liquidate $160 million in loans backed by approximately 68,000 Bitcoin mining machines.
• Some of the loans have already defaulted and are under-collateralized due to low crypto prices.
• The increased liquidations could increase the overall sell pressure in Bitcoin and crypto prices.
Troubled crypto firm BlockFi is facing mounting troubles, as it plans to liquidate approximately $160 million in loans backed by approximately 68,000 Bitcoin mining machines. This move comes as the industry is set to face more challenges in the coming year, according to crypto lawyer Harrison Dell, Director at Australian law firm Cadena Legal.
The liquidations are a result of some of the loans having already defaulted and being under-collateralized due to low crypto prices. This is leading to an increase in the sell pressure in Bitcoin and crypto prices. The bidding process for these loans began last year and is scheduled to end soon, with debt-collection businesses most likely being the ones buying up the debts for „cents on the dollar“.
BlockFi is also eyeing a share from the $465 million in SBF’s Robinhood stake that the DoJ anticipates seizing as proceeds of fraud. This could potentially help the company repay creditors, however, liquidating assets is still the more likely scenario. This could prove to be a major blow for the industry, as it would further add to the sell pressure in the crypto market.
Additionally, BlockFi is also facing a lawsuit from one of its users, which claims that BlockFi misled customers about its services and fees. The lawsuit is still in its early stages, and it remains to be seen how things will pan out for the company.
As the situation continues to develop, it will be interesting to see how the crypto industry responds to these issues. It is clear that there are still a lot of uncertainties in the crypto space, and that it may take some time before the crypto market can truly recover.