BlockFi Wins Bankruptcy Court Approval to Auction Mining Assets

BlockFi, the crypto lender that declared bankruptcy after the failure of FTX, won approval from a New Jersey bankruptcy court to start auctioning its cryptocurrency mining assets–and says it has suitors seeking to buy all or part of the company.

The firm said in a filing earlier this month that it had approached 106 potential buyers to sell a part or all of its business. According to BlockFi’s petition, it aims to receive buyer bids by Feb. 20 and complete the auction a week later. The company will then file the motion of sale for any deal it reaches before the court by March 1. 

“We’ve received substantial interest in the market for bidding purposes,” BlockFi’s lawyer, Francis Petrie, said during a hearing on Monday, according to Bloomberg.

In its Chapter 11 bankruptcy filing in November, BlockFi said its assets and liabilities were in the range of $1 billion to $10 billion and that it owed money to more than 100,000 creditors. Court documents show BlockFi owes FTX $275 million, making the embattled crypto exchange BlockFi’s second-largest creditor. 

The crypto-lender had been struggling even before the collapse of FTX. In July, FTX extended a $400 million line of credit to BlockFi. The sudden drop in cryptocurrency prices caused a liquidity crunch for BlockFi.

BlockFi’s relationship with FTX is complicated. According to CNBC, BlockFi has up to $1.2 billion of assets stuck with FTX and its associated entities. Once FTX went belly up last November, BlockFi was forced to suspend activity and client withdrawals. As a part of the bankruptcy proceedings, BlockFi asked the courts to allow withdrawals for some customers in December.