BlockFi to sell mining machine assets for 600 million yen

BlockFi to sell mining machine

The U.S. bankruptcy court today approved the sale of mining machines and other physical assets by BlockFi, a crypto asset (virtual currency) lending service that is undergoing bankruptcy proceedings, for approximately 610 million yen ($4.7 million).

BlockFi’s attorneys said the assets were sold to an organization called USFarms. Prior to the purchase decision, there were five bids for the entire set of mining assets and seven bids for a portion of the assets, according to the company.

BlockFi filed for bankruptcy under Chapter 11 (Chapter 11) of the US Bankruptcy Code in November 2022. Chapter 11 is a corporate restructuring project that reduces debt while continuing to operate. In order to maximize the recovery of creditors’ assets, the property of a company that has filed for bankruptcy may be sold to a third party and distributed to creditors.

On January 30, BlockFi received permission from New Jersey bankruptcy court to sell its mining machines and other assets. The court found the sale to be “fair, reasonable and appropriate” and to restore the business and maximize “realizable value.”

In January, it was also reported that BlockFi was proceeding with the sale of about ?20 billion worth of loan bonds. A loan designed for Bitcoin miners, backed by a total of 68,000 mining machines. Due to the drop in mining machine prices, there is a possibility that some of them have fallen into a shortage of collateral.

connection: BlockFi to sell 20 billion yen worth of Bitcoin mining machine-backed loan

Crypto Mining Industry Signs Upwards

The cryptocurrency mining industry was hit hard last year by falling bitcoin prices and rising electricity bills, a major expense. However, these trends are waning.

A spokesperson for Core Scientific, which filed for bankruptcy in Chapter 11 in December 2022, said earlier this month it was being helped by rising Bitcoin prices. “Electricity prices have also fallen dramatically, so we are spending a lot of money on hiring experts and so on, but we are doing very well operationally,” he added.

The mining machine market also turned upward in late January for the first time since December 2021. According to Luxor, which operates a mining machine trading desk, the price of the most efficient machine has risen 9% in the past two months.

Ethan Vera, chief operating officer of Luxor, said miners tend to use less leverage than before to hedge risks related to revenue and costs. On the other hand, he said that mining machine prices and bitcoin prices tend to correlate.

Matthew Schultz, Chairman of US mining company CleanSpark, also commented:

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