Bitfarms, a Canadian bitcoin (EXANTE: Bitcoin) mining company, said in a recent press release it is seeking to modify its $20 million outstanding loan with the now-bankrupt crypto lending firm BlockFi.
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The Ontario-based company said that its subsidiary Backbone Mining Solutions (BMS) is running a 20-megawatt bitcoin mining facility in the State of Washington, which was backed by BlockFi with a $32 million loan in February 2022. So far, the loan is only secured by $5 million in assets.
"As a result, the Company determined that it would be advisable to seek more favorable terms from BlockFi and potentially take other steps to reduce the BMS obligations."
Bitfarms added that it has already taken "certain actions" and may in the future stop making installment payments, that "constitute defaults under the loan agreement." The mining company acknowledged that "neither a restructuring on more beneficial loan terms nor a reduction in BMS's indebtedness is assured."
BlockFi filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of New Jersey in November last year. According to court documents, BlockFi — which was valued in a moment at $4.8 billion — has over 100,000 creditors, with liabilities and assets ranging from $1 billion to $10 billion.
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