Bankrupt BlockFi Cleared for $10M Staff Bonus

Bankrupt BlockFi Cleared for $10M Staff Bonus

Crypto lender BlockFi has secured approval from New Jersey judge Michael Kaplan for a $10 million staff bonus package. 

The package, which will be distributed among the company’s employees, is part of the “employee retention program” aimed at the few who are sticking around. 

According to court documents, the bankrupt firm could pay $9.98 million in three installments over a 12-month period. The payment is divided into two tiers. The first tier will provide employees with 42.5% of their base salary, and the second tier will give an additional 9% of their base salary.

However, the court filing did not specify the number of employees eligible for the bonus package or the criteria for each tier. Currently, BlockFi employs around 130 people. 

“It’s essential that the debtors institute these retention programs to keep critical workers with the company,” Rush Howell of law firm Kirkland & Ellis stated in court, further adding that around 10% of the staff had left since BlockFi filed for bankruptcy. “These retention programs are critical to the debtors’ success … maximizing recoveries to stakeholders.”

BlockFi executives received pay raises of up to $275,000 each after the company requested a bailout from crypto exchange FTX in June 2022. 

The crypto lender was dependent on FTX for a $400 million line of credit and filed for Chapter 11 bankruptcy protection shortly after FTX filed for the same in November.

Meanwhile, other crypto firms that have filed for bankruptcy, such as Celsius and Voyager, have also requested retention programs for their employees. Both companies have argued that the payments would help in retaining scarce talent.

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Himan Mohapatra
Himan Mohapatra
Himan Mohapatra is an industry expert within the crypto-sphere and the primary journalist for Coinmash. He is an expert in finance and disruptive tech, such as blockchain.