Crypto mining is now legal for BlockFi

Crypto mining is now legal for BlockFi

BlockFi was a strategic cryptocurrency lender that was once settling volumes of trade each day. It executed its trades on FTX and acted as a lender to renowned cryptocurrency firms such as Alameda. In order to streamline its operations, BlockFi raised two rounds of funding which was approximately 850 million dollars. 

The aim of this round was to enhance the ability of the lender to offer lending facilities across diversified firms and companies. As a side effect of the impending recession, FTX soon crashed and as a result, BlockFI found it difficult to cope with the mounting losses. 

Hence over time, has ended up creating deadlines worth discussing. It was in the month of November 2022 that BlockFi filed for Chapter 11 Bankruptcy Proceedings.  The company has been ever since reducing its operational expenses by downsizing its workforce by 20% in a span of 2 months. The company pleaded before the Court to allow the application and provide an opportunity to clear off the debts. 

The US-based crypto lender has been given permission by the US Court of Bankruptcy to proceed ahead with the sale of the crypto mining assets in order to make up for the lost capital. The decision has come against the backdrop of the insolvency proceedings initiated against the company on account of its failure to repay the debt. 

What are the details of the Court’s Order? 

The Court via its recent order dated 30 January 2023, has admitted the application filed by BlockFi itself. The order allows the company to sell the assets at market value. The company has expressed its inability to pay its debts and selling out the assets is the only available option in this regard. The Court has ordered the company to invite the bids within the span of 2 weeks. 

What are the details of the Court's Order? 

It has further directed the management to notify the qualifying parties by the third week of February, not later than 20th February 2023. Apart from this, the court has even provided the opportunity to the creditors and their representatives to object to the bids and the sale of the assets. Such objections have to be filed no later than 16th March 2023. The decision aims to equitably balance the interests of the creditors, promoters and associated stakeholders over a period of time. 

How can bidders participate in the bids

The Court has further directed the company to develop a detailed brochure enlisting the details of all the assets. Such a brochure would be publicized and made public so that they could proceed ahead with the process of bidding.

The bidders can apply for the assets by participating in the bidding process. The following steps have to be undertaken in this regard by the prospective bidders. 

Prepare a detailed proposal 

As a first step, the bidders are required to go through the brochure in detail. They have to select the asset that they are looking forward to purchasing.  Next, they are required to draft a detailed proposal.

Such a proposal should contain the list of the assets that they are willing to purchase, the price at which they want to lock the deal and the way in which they will finance such assets. Even the sources of finance must be sufficiently disclosed in order to avoid confusion. 

Send this proposal to the concerned authority

The Court via its order has mandated the company to appoint an officer who would be responsible for receiving the bids. He would be referred to as a representative of the company. The details of such representatives should be made public so that the bidders can send their bids and proposals. 

Alterations and amendments

The law provides a minimum duration of 1 week from the time of submission to make changes to the submitted bid before the same is finalised. This provision has been incorporated in order to enable the representative to scrutinize the bid properly and in a hassle-free manner. 


Every bidder would be receiving an acknowledgement of such receipt of the bid. However, it is not equivalent to acceptance. The management and the representative of the company are responsible for accepting the bids. It is only when the quotation quoted in the bid is acceptable to the company that the bidder would be communicated the acceptance. 

What does BlockFi plan to do

The aim of the company is to find a final exit policy for the investors and the creditors at a fair value. That is why the company is expected to invite as many bids as possible for all the assets so that it becomes feasible for the company to reap the best value. 

The company wants to realize the assets by taking advantage of the market conditions and for this, it has decided to refrain from limiting the number of bids that would be otherwise received by the company. 

The recent cryptocurrency rallies have reaffirmed the belief that the available assets could be traded at a profitable rate. The company wants to realize such a value at any cost so that the future of the company is secured.

Until now, there has not been any objection on behalf of the creditors and their counsels in this process of bidding. The Court has even ordered the compliance agencies to critically evaluate the process of acceptance and overlook that everything is happening as per the mandate of law. 

The company has already disclosed all the details as mandated by the law. The aim is to comply with the law and avoid any discrepancies at such a stage. The company is also being monitored by a committee of creditors who use their commercial wisdom to evaluate any bid. 


It has to be concluded that this is a tough time for the company and if everything goes well then the company would be able to offer a good price to the investors. This is the future policy of the company and the same has to be taken into account. 

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