BlockFi to sell $4.7 million of physical mining assets amid bankruptcy

A bankruptcy judge approved the sale of bankrupt lender BlockFi's mining machines and other physical assets for $4.7 million.

The assets were sold to a party called U.S. Farms, an attorney with BlockFi told the court on Thursday.

The deal was reached after a "very competitive" auction process that yielded five bids for the complete mining asset package and seven additional partial bids, the attorney told the court. 

BlockFi was one of the biggest lenders in the bitcoin mining space even though that represented a small portion of the firm's total business. The company was reportedly looking to sell $160 million in mining loans. Because many of them were secured by ASIC machines, which dramatically fell in price over the last year, the loans may now be under-collateralized.

The sector was hit hard last year by the decline in bitcoin prices that occurred just as power costs — their most significant expense — shot up. A reversal in those trends has recently given companies in the space some much-needed breathing room.

Another bankrupt crypto lender, Celsius, also had a significant self-mining business and in January sold $1.3 million in mining machines. It also saw a large portion of its mining fleet get unplugged by bankrupt hosting provider Core Scientific in January.