- 68,000 mining rigs will support Bitcoin mining loans from BlockFi.
- As a result of the fall in mining rig prices, several of these loans have insufficient collateral.
- Celsius Mining moved with the court to sell its $1.3 million mining equipment earlier this month.
Bankrupt cryptocurrency lender BlockFi Inc., which is a firm with its headquarters in Jersey City, New Jersey, has made the statement that it would be selling around $160 million worth of Bitcoin (BTC) mining hardware. This figure is supported by approximately 68,000 mining machines.
BlockFi saw a substantial loss of value in the year 2022 as a consequence of the failures of FTX in November and Three Arrows Capital in the second quarter of the same year. When FTX declared bankruptcy, BlockFi followed suit, launching a trend of companies that have already failed but are compiling a list of creditors in the hopes of recouping customer funds. This trend began after BlockFi followed FTX’s lead and declared bankruptcy.
According to Bloomberg reports, some loans have been reported as being undercollateralized and seem to have insufficient collateral when evaluating the current cost of rigs. The price of mining rigs has plummeted by over 80 percent over the past year as a direct result of the reduction in the value of Bitcoin. The mining industry saw a decrease in profit margins all through the course of the previous year as a direct result of the rising cost of power.
According to other reports, cryptocurrency loan firm Celsius Network is selling its mining gear. On January 13, the insolvent company’s mining section petitioned the bankruptcy court for permission to sell around 2,687 Bitcoin mining equipment to an investment entity called Touzi Capital.
