BlockFi’s Employee Retention Package Approved by Bankruptcy Judge

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Bankrupt crypto lender, BlockFi has received permission from a New Jersey bankruptcy judge to offer bonuses to top employees. According to reports from The Block, the defunct crypto lender has lost 11 staff, which is approximately 10% of its current employees.

Judge Michael Kaplan stated that he is pleased to grant the approval. He continued by saying that the approval will enable BlockFi and its staff to maximize the estate and proceeds.

BlockFi requested court approval for its personnel program, which awards top employees incentives of 10% or 50% of base salary, in November. The company had just applied for bankruptcy protection at the time, and employers like Google, Walmart, and Meta were bidding for its staff. An estimated $10 million will be spent on the program.

It is worth noting that there were several oppositions to the motion. Both the United States Trustee and the official committee of unsecured creditors filed objections to the motion. As a result, the motion was rescheduled several times before the final judgment.

The news comes amid widespread turmoil in the crypto industry and many crypto firms such as ConsenSys and Coinbase cutting down their staff size to remain afloat.

BlockFi’s Financial Report Raises Questions

BlockFi is currently under fire for publishing a financial report that contained exposure figures that differed from those previously published by its lawyers.

The report that was accidentally published by the crypto lender revealed that the firm has up to $1.2 billion exposure to the defunct FTX and its subsidiary firm, Alameda Research LLC. This caused concern in the online community because BlockFi’s previously uploaded data indicated an even lower exposure to the bankrupt exchange.

BlockFi’s lawyers initially estimated a $671 million loan to Alameda Research and $355 million in frozen figural assets on the FTX exchange.

In BlockFi’s defense, one of its lawyers, Joshua Sussberg, stated that the financial reports in court documents differed because one figure marked a loan from Alameda Research, which used FTX’s native utility token as collateral, down to zero.

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