Last Updated on January 24, 2023 by Bitfinsider
In the midst of its bankruptcy proceedings, cryptocurrency lender BlockFi is attempting to sell $160 million in debts backed by bitcoin mining equipment. Due to the fall in machine values, some of the loans may not have adequate collateral as of the commencement of the bidding process last year.
Over the course of last year, the cost of mining rigs decreased by more than 80% as the margins for mining were squeezed by falling bitcoin prices and rising electricity expenses.
Despite the fact that mining only makes up a small portion of BlockFi’s business, its Chief Risk Officer Yuri Mushkin said in October that the company was a significant lender in the industry. Since the spring of 2022, it hasn’t underwritten any new loans to miners, according to Mushkin.
The biggest participant, Core Scientific, filed for Chapter 11 bankruptcy in December, which has caused problems for the mining industry. In the meantime, Argo Blockchain paid Galaxy Digital $65 million for the rights to use its Texas headquarters.
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