BlockFi, the cryptocurrency lender that filed for bankruptcy following the demise of FTX, received permission from a New Jersey bankruptcy court to begin auctioning off its cryptocurrency mining assets, and it claims it has interested parties looking to purchase all or a portion of the business.
In a filing earlier this month, the company stated that it had contacted 106 prospective purchasers regarding selling all or a portion of the business. BlockFi’s petition states that it hopes to receive buyer offers by February 20 and end the auction a week later. The business will next submit the motion of sale to the court by March 1 for any agreement it comes to.
Francis Petrie, a lawyer representing BlockFi, reportedly stated during a hearing on Monday that the company had had a lot of interest in the market for the purpose of bidding.
BlockFi stated that it owes money to more than 100,000 creditors in its Chapter 11 bankruptcy case, which was made in November, and that its assets and liabilities were in the $1 billion to $10 billion range. BlockFi’s second-largest creditor is the troubled crypto exchange FTX, according to court filings, which reveal BlockFi owes $275 million to it.
Even before FTX crashed, the crypto-lender was having trouble. In July, FTX provided BlockFi with a $400 million line of credit. For BlockFi, the unexpected decline in crypto values resulted in a liquidity shortage.
The partnership between BlockFi and FTX is complex. According to Reuters, BlockFi is stuck with up to $1.2 billion in assets that belong to FTX and its related organizations. When FTX collapsed in Nov of last year, BlockFi was had to halt operations and customer withdrawals. In December, BlockFi sought the courts to permit withdrawals for select users as part of the bankruptcy procedures.
