Crypto lender BlockFi plans to sell $160 million Bitcoin mining loans

  • BlockFi Bitcoin mining loans will be backed by 68,000 mining machines.
  • Some of these loans are undercollateralized thanks to the decline in mining rigs’ prices.
  • Earlier this month, Celsius Mining also filed with the court to issue the sale of its mining equipment worth $1.3 million.

BlockFi took a major hit last year following the collapse of FTX in November and Three Arrows Capital in Q2 2022. Filing for bankruptcy right after FTX, BlockFi initiated a list of companies that went under soon after which are still attempting to recover their customers’ funds. BlockFi itself is looking to achieve the same.

BlockFi Bitcoin mining loans

BlockFi is currently looking to sell Bitcoin mining machine-backed loans to users using its 68,000 rigs. The loans, which amount to $160 million, are expected to be undercollateralized due to the drop in the price of the mining machines. 

On average, this time last year, mining rigs under 38 J/Th were worth around $98, which have since lost their value by almost 90% and are currently worth around $9.9. Reasons behind this range from the crash of the crypto market and decline in BTC price as well as the rising costs of operations, including power costs.

The drowning mining market had the likes of BlockFi financing it even though traditional lenders maintained a distance due to the high volatility of the crypto market.

Other financiers included the New York Digital Investment Group, Digital Currency Group’s Foundry, Galaxy Digital and the bankrupt lender Celsius Network. 

Celsius Mining sells its miners

Unlike BlockFi selling Bitcoin mining machine-backed loans, crypto lender Celsius Network was reported to be selling its mining equipment. Filing with the bankruptcy court on January 13, the mining arm of the bankrupt company said it was looking to sell about 2,687 rigs of Bitcoin miners to an investment company called Touzi Capital.

Earlier this month, the founder and Chief Executive Officer (CEO) of the bankrupt lending firm, Alex Mashinsky, was sued by New York Attorney General Letitia James.

According to James, Alex was responsible for defrauding hundreds of thousands of customers and sought to bank him from conducting business in New York again, along with recovering the losses faced by the investors.