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Bankrupt Crypto Lender BlockFi Takes Two-Thirds Loss to Settle Bitcoin Miner Bitfarms' Debt
The miner had recently warned it might stop paying off the debt to bankrupt BlockFi.
Updated May 9, 2023, 4:07 a.m. Published Feb 9, 2023, 12:58 p.m.
Bitcoin mining firm Bitfarms (BITF) agreed to settle its remaining $21 million of debt with bankrupt lender BlockFi for a single cash payment of $7.75 million, according to a Thursday press release.
The miner has been working to reduce its debt obligations since mid-2022, including selling a significant portion of its amassed bitcoin holdings. In January, the Toronto-based company said it might default on its obligations to BlockFi, which were secured by only $5 million in assets.
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BlockFi, a major lender to miners, filed for Chapter 11 bankruptcy protection in November as reverberations from the implosion of crypto exchange FTX were felt through the industry.
“Lowering our debt nearly 85% from a high of $165 million in June 2022 to $25 million today has significantly decreased principal and interest obligations, which boosts our cash flow and positions us well for future growth," Bitfarms CEO Jeff Lucas said in the Thursday press release.
Leveraged miners have had a hard time paying off their lenders during the bear market, with some loans ending in collateral seizures or contributing to Chapter 11 bankruptcies.
Read more: Bitcoin Miners’ FTX Contagion Exposure May Amplify Industry Pain
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