Bitcoin (BTC) mining firm Bitfarms has unveiled plans to switch an present mortgage settlement with BlockFi — a transfer the corporate stated would scale back its indebtedness amid the bear market.
On Jan. 13, Bitfarm disclosed that it’s working with collectors to switch 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 tools financing mortgage from Bitcoin lender BlockFi in February 2022. The mortgage was secured towards present BMS belongings, together with its miners and a sure proportion 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 beneath $20,000, reaching a low of round $15,600 in November, in accordance with information from Cointelegraph Markets Professional and TradingView.
Because 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 will be advisable to hunt extra favorable phrases from BlockFi and doubtlessly take different steps to cut back the BMS obligations,” the corporate stated.
Jeff Lucas, Bitfarms’ chief monetary officer, additional defined:
“Contemplating right this moment’s difficult market situations, we’re in search of to switch our Washington state debt facility to attain phrases which can be higher aligned with the market outlook and our enterprise technique.”
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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.
️ Ben Gagnon, Chief Mining Officer: “In December, we deployed new miners and underclocked our least cost-efficient miners. This improved their effectivity by 15%, leading to a discount of almost 4 MW of energy consumption and representing substantial value financial savings.”#BITF #BTC pic.twitter.com/YR5dUtBa54
— Bitfarms (@Bitfarms_io) January 10, 2023
BlockFi is having difficulties of its personal after submitting for Chapter 11 chapter in November. The Bitcoin lender shuttered its doorways after crypto trade FTX — its savior through the Terra ecosystem collapse — imploded with little warning.
The fallout of the FTX collapse continues to reverberate throughout the market. The trade’s former CEO, Sam Bankman-Fried, faces eight felony fees and as much as 115 years in jail for his alleged function in defrauding buyers.