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Bitfarms seeks to modify loan facility with BlockFi as bear market drags on

Bitfarms seeks to modify loan facility with BlockFi as bear market drags on

Bitcoin (BTC) mining firm Bitfarms has unveiled plans to change an present mortgage settlement with BlockFi — a transfer the corporate mentioned would cut back its indebtedness amid the bear market.

On Jan. 13, Bitfarms disclosed that it’s working with collectors to change a mortgage settlement for Spine Mining Options, or BMS, which owns and operates Bitfarms’ 20-megawatt mining facility in Washington state. BMS acquired a $32 million gear financing mortgage from Bitcoin lender BlockFi in February 2022. The mortgage was secured towards present BMS belongings, together with its miners and a sure share of BTC produced by its mining rigs.

When BMS acquired the mortgage facility, Bitcoin was buying and selling north of $40,000. The worth of the flagship digital asset has since plunged under $20,000, reaching a low of round $15,600 in November, in line with knowledge from Cointelegraph Markets Professional and TradingView.

On account of the bear market, the belongings securing BMS’ mortgage have fallen to round $5 million, whereas the excellent principal and curiosity are roughly $20 million.

Bitfarms “decided that it could be advisable to hunt extra favorable phrases from BlockFi and probably take different steps to scale back the BMS obligations,” the corporate mentioned.

Jeff Lucas, chief monetary officer of Bitfarms, additional defined:

“Contemplating right now’s difficult market circumstances, we’re looking for to change our Washington state debt facility to realize phrases which might be higher aligned with the market outlook and our enterprise technique.”

Associated: BTC value 3-week highs greet US CPI — 5 issues to know in Bitcoin this week

Bitfarms and its subsidiaries maintain roughly $36 million value of unencumbered crypto belongings towards roughly $47 million value of debt, which incorporates the $20 million BlockFi mortgage. In an effort to chop prices, the corporate has elevated operational effectivity by deploying new miners. 

BlockFi is having difficulties of its personal after submitting for Chapter 11 chapter in November. The Bitcoin lender shuttered its doorways after crypto change FTX — its savior throughout the Terra ecosystem collapse — imploded with little warning.

The fallout of the FTX collapse continues to reverberate throughout the market. The change’s former CEO, Sam Bankman-Fried, faces eight legal fees and as much as 115 years in jail for his alleged function in defrauding buyers. 

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