A US court approves the BlockFi request to sell several assets to raise money to pay creditors. The assets include about 8000 pieces of mining equipment owned by the exchange.
On January 31, the New Jersey bankruptcy court granted BlockFi the approval to sell assets to pay creditors. The bankrupt crypto exchange valued side assets at approximately 100 million USD. The assets will include about 8000 crypto mining equipment owned by the exchange.
The exchange filed for bankruptcy on November 28, 2022, under Chapter 11 of the US bankruptcy code in New Jersey. This decision came weeks after FTX’s collapse and bankruptcy. The exchange also halted the withdrawal of customer funds a week before this filing. A decision meant to protect the exchange while restructuring its services to accommodate users better in the future.
New Filing by BlockFi
On December 19, BlockFi requested to employ independent professionals, including auctioneers and appraisers, to administer the bankruptcy case.
According to the bankruptcy court in New Jersey, all interested buyers should place bids before February 20, 2023, for the assets. The auction for the assets will take place on February 28. The creditors have until 16 march to move against the sale of the assets.
The approval grants the exchange to settle its debts accumulated over the years. BlockFi has an excess of 100,000 creditors. BlockFi owes the Securities and Exchange Commission (SEC) 30 million USD as part of a $100 million settlement publicized in February. In this new filing, BlockFi stated that it has 1 billion in assets and 10 billion in liabilities, which include 729 million USD owed to Ankura Trust Company. This company runs its interest accounts.
The exchange also owes West Realm Shires Inc, the company operating as FTX US, $227 million from its revolving line of credit. BlockFi also owes $49 million to an unknown client. This makes the top list of creditors owed by the crypto exchange firm.
Under the same filing, the exchange requested the court to allow users to withdraw assets held in their crypto wallets. BlockFi claimed they were entitled to their funds held at all times. Additionally, the debtors have no legal or equitable interest in the cryptocurrency present before the halting of the withdrawals. However, this does not affect BlockFi interest accounts, according to a statement issued on Tuesday.
