Bitcoin miners, who had raised around $4 billion from crypto lenders this year, have started to defaulting on their loans, sending mining equipment back to lenders, Bloomberg has learned, citing mining firms.
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The report says such brokers as New York Digital Investment Group, (bankrupt Celsius Network and BlockFi), Galaxy Digital, and the Foundry are among the biggest lenders. Ethan Vera, Chief Operations Officer at Luxor Technologies, told Bloomberg that miners "ended up dictating a lot of the loan terms, so the financiers moved ahead with a lot of the deals where only the machines were collateral."
Bitcoin mining firm Iris Energy is expecting to default on $108 million of limited recourse loans backed by mining equipment. The company has already closed most of its devices. Other mining companies are also getting ready for restructuring options.
A spokesperson for Galaxy Digital, Michael Wursthorn, said that the firm is continuing to take a "prudent, risk-managed approach toward financing arrangements in the mining space." He added: "In the third quarter, for example, Galaxy’s mining arm closed three existing machine leases collectively worth about $8 million at expected terms without defaults, delinquencies, or losses."
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