Bitfarms Warns of Possible Default on BlockFi Loan

The mining company Bitfarms заявила that it is seeking more favourable repayment terms for the $20 million remaining loan from the crypto-lending platform BlockFi. Among other actions, the firm allowed a halt in repayments.

In February 2022 Bitfarms’ subsidiary in Washington State (USA) entered into an agreement with the platform to obtain a loan of $32 million.

The subsidiary Backbone Mining Solutions (BMS) operates a 20 MW data centre in the region.

The loan collateral consisted of the company’s ASIC miners and a stake in the bitcoins produced. According to BMS, the current value of these assets stands at around $5 million, with outstanding interest and principal roughly $20 million.

«As a result, Bitfarms decided that it would be prudent to obtain more favourable terms from BlockFi and potentially take other steps to reduce BMS’s obligations», the press release said.

According to the statement, the company has taken ‘certain actions’ and intends to take further steps.

Bitfarms abandoned its strategy of holding mined bitcoins and became one of the leaders in the volume of liquidation of cryptocurrency reserves among publicly listed mining companies.

In an exclusive ForkLog feature, what happened in the mining industry in 2022 and how its participants survived the bear market.

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