BTC (bitcoin) $20,929 less in tickers Bitfarms, a mining company, has announced plans to change an existing loan deal with BlockFi. The company claims this will lessen its debt during the weak market.
On January 13, Bitfarm revealed that it was negotiating with creditors to change a loan agreement for Backbone Mining Solutions, or BMS. This company owns and runs Bitfarm’s 20-megawatt mining plant in Washington state. BMS is the owner and operator of Bitfarm. BlockFi, a bitcoin lender, granted BMS a $32 million equipment finance loan in February 2022. Existing BMS assets, including its miners and a portion of the BTC generated by its mining rigs, served as collateral for the loan.
We are attempting to change the terms of our Washington state financing facility to obtain conditions that are more in line with the prognosis for the market and our corporate strategy. For every $47 million in debt, including the $20 million BlockFi loan, Bitfarms and its affiliates have around $36 million in unencumbered crypto assets. The business has boosted operational effectiveness by deploying new miners in an effort to reduce costs.
🗣️ Ben Gagnon, Chief Mining Officer: "In December, we deployed new miners and underclocked our least cost-efficient miners. This improved their efficiency by 15%, resulting in a reduction of nearly 4 MW of power consumption and representing substantial cost savings."#BITF #BTC pic.twitter.com/YR5dUtBa54
— Bitfarms (@Bitfarms_io) January 10, 2023
Following its Chapter 11 bankruptcy filing in November, BlockFi is currently experiencing its own problems. The Terra ecosystem collapse’s rescuer, the cryptocurrency exchange FTX, disintegrated without notice, forcing the Bitcoin lender to close its doors.
The effects of the FTX crash are still being felt throughout the market. Sam Bankman-Fried, the former CEO of the exchange, is charged with eight crimes and could spend up to 115 years in prison.