Defunct Crypto Lender BlockFi Granted Approval to Sell Assets

Defunct crypto lender BlockFi has earned court approval to sell its remaining assets.

BlockFi, which let users earn interest on their deposited cryptocurrencies, fell into bankruptcy in late November 2022 due to its connection with FTX, which had previously extended the firm several lines of credit.

These included a $250 million line of credit in June 2022, earmarked to “bolster its balance sheet.”

As per a new filing made in a New Jersey Bankruptcy Court on January 30, potential suitors will have until February 20 to submit their bids for BlockFi’s assets.

If applicable, an auction for the assets will then be held on February 28. Creditor's representatives have until March 16 to object to the sale of these assets.

BlockFi first applied to appoint independent “appraisers, auctioneers, or other professional persons” for the administration of its bankruptcy case on December 19.

The assets up for sale could potentially include the multitude of crypto-mining equipment that the company holds.

As per a report from Bloomberg last week, the company was considering offloading,8,000 Bitcoin mining machines, in exchange for up to $160 million in loans.

Decrypt has contacted BlockFI for comment on the news.

BlockFi’s creditors

Shortly after the crypto lender filed for bankruptcy, it emerged that the firm owed more than $1 billion to three of its largest creditors. This included the Securities and Exchange Commission (SEC) as part of a $100 million settlement with the regulator in February 2022.

In total, BlockFi's bankruptcy filing indicates that the firm owes money to more than 100,000 creditors.

The firm also petitioned the bankruptcy court in December to allow users to withdraw their holdings, calling the move an “important step toward our goal of returning assets to clients through our chapter 11 cases.”