Crypto lender BlockFi is looking to sell $160 million in bitcoin mining machine-backed loans amid its bankruptcy process.
The bidding started last year and some of the loans may be under-collateralized due to the decline in machine prices, unnamed sources told Bloomberg.
The price of mining rigs fell more than 80% over the course of last year as the decline in bitcoin prices and the spike in power costs squeezed mining margins.
BlockFi was a major lender in the mining sector, although mining only accounts for a minority of the firm’s business, as its Chief Risk Officer Yuri Mushkin told The Block in October. It has not underwritten any new loans to miners since the spring of 2022, Mushkin said.
Miners have been struggling with the biggest player, Core Scientific, filing for Chapter 11 bankruptcy in December. Meanwhile, Argo Blockchain sold its flagship facility in Texas to Galaxy Digital for $65 million.