Crypto lender BlockFi — having filed for bankruptcy weeks after the collapse of FTX — is planning to sell around $160 million of Bitcoin (BTC) miner-backed loans, Bloomberg reported.
The loans are collateralized by approximately 68,000 BTC mining machines, as per the report — which cited anonymous sources.
Some loans have already defaulted and some have also become under-collateralized following the steep fall in BTC mining rigs last year, according to the report.
BTC miners down 85%
The price of BTC miners fell by around 85% over the past year, according to Hashrate Index Data. Furthermore, the fall in BTC price in 2022 — alongside the rising cost of power — squeezed miner margins, impacting demand for the BTC mining rigs.
BlockFi was a major lender in the embattled mining sector, which has seen several players struggle with liquidity over the past year. One of the biggest players, Core Scientific, filed for Chapter 11 bankruptcy in December 2022.
Meanwhile, Argo Blockchain sold its Texas mining facility to Galaxy Digital for $65 million — securing a $35 million loan from the firm in late December 2022.