BlockFi Gets Approval to Pay Staff $10M Bonus

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New Jer­sey bank­rupt­cy court Judge Michael Kaplan approved cryp­to lender’s Block­Fi motion to pay its staff up to $10 mil­lion in a “reten­tion pro­gram,” accord­ing to a Jan. 27 filing.

Court fil­ing showed that Block­Fi could pay its staff a $9.98 mil­lion in three install­ments over a 12 months peri­od. The bank­rupt firm pay­ment was divid­ed into two tiers: the first pays the staff 42.5% of their base salary while the oth­er pays them 9% of their base salary.

Mean­while, the court fil­ing did not state the num­ber of employ­ees eli­gi­ble for the bonus nor did it state the qual­i­fi­ca­tion for either of the tiers. Media reports have tied the num­ber of employ­ees at the firm to 130.

Why the Bankrupt Firm Wants to Pay its Staff Bonus

The bank­rupt cryp­to lender pre­vi­ous­ly argued that it need­ed to pay its staff the bonus so that it could retain their ser­vices through­out the bank­rupt­cy proceedings.

Accord­ing to BlockFi’s Chief Peo­ple Offi­cer Megan Crow­ell, there was a rag­ing war for tal­ents and it staff “have many oppor­tu­ni­ties inside and out­side the cryp­tocur­ren­cy sector.”

How­ev­er, BlockFi’s unse­cured cred­i­tors argued that the pro­posed bonus was “broad­er and more expen­sive than oth­er cryp­to cases.”

Sep­a­rate­ly, oth­er bank­rupt cryp­to firms like Cel­sius and Voy­ager had also request­ed reten­tion pro­grams for their employ­ees. Both firms argued that the pay­ment would help to retain the ser­vices of the scarce tal­ents their employ­ees offered.

Other Updates From BlockFi’s Bankruptcy

Recent finan­cial doc­u­ments have revealed that Block­Fi had a $1.2 bil­lion expo­sure to bank­rupt cryp­to firms FTX and Alame­da Research. The bank­rupt lender fil­ing showed $415.9 mil­lion in assets on FTX and $831.3 mil­lion in loans to Alame­da. Besides that, the firm had 662,427 users, and over 70% had bal­ances less than $1,000.

Addi­tion­al­ly, Bloomberg report­ed on Jan. 23 that the lender planned to sell $160 mil­lion in loans col­lat­er­al­ized by 68,000 min­ing machines. The lender’s busi­ness, along­side oth­er min­ers, was severe­ly hit by Bit­coin’s record-low 2022’s decline.

Also, the lender laid claim to Sam Bankman-Fried’s Robin­hood shares before it was seized by US author­i­ties. Accord­ing to the lender, the stocks were pledged as col­lat­er­al for a loan it gave to Alameda. 

Disclaimer

BeIn­Cryp­to has reached out to com­pa­ny or indi­vid­ual involved in the sto­ry to get an offi­cial state­ment about the recent devel­op­ments, but it has yet to hear back.

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