BlockFi permitted to pay $10M in staff bonuses in spite of bankruptcy

Bankrupt crypto lending firm BlockFi has been granted court permission to pay nearly $10 million in staff bonuses, according to a filing dated Jan. 27.

The filing does not use the word “bonus” itself. Instead, it refers to an employee retention program and describes additional payments on top of base salaries.

The program will see BlockFi pay up to $9.98 million to a few remaining employees. That amount will be distributed to employees in three installments. There will be two tiers of payment: one which pays employees 42.5% of their base salary amount and one which pays employees 9% of their base salary amount.

Today’s filing additionally notes that BlockFi has been “authorized, but not directed,” to enact this employee retention program. Though the firm will seemingly not be required to pay all or any of its employees, it will need to complete the last of the three payouts within 12 months of court approval if it chooses to proceed with the retention plan.

The court filing did not state how many employees are eligible for the bonus. However, recent reports suggest that the firm has about 125 employees at present.

BlockFi initially justified its request by stating that its employees would likely be hired elsewhere due to aggressive competition. Statements from BlockFi’s legal representation suggest that the firm’s employees play a critical role in returning assets to investors.

BlockFi’s decision to pay its staff will undoubtedly be controversial because it has not yet fully reopened customer withdrawals. In December, the company began to take steps in court to reopen essential wallet withdrawals while leaving interest-bearing wallets closed. Regardless, all wallets appear to remain frozen as of Jan. 27.

BlockFi’s bankruptcy proceedings are in the U.S. Bankruptcy Court for the District of New Jersey. Judge Michael Kaplan is overseeing the case.