Bankrupt crypto lending firm BlockFi won court approval to pay nearly $10 million in bonuses to staff, dated filing shows January 27.
The repository 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. This amount will be distributed to employees in three instalments. There will be two payout tiers: one that pays employees 42.5% of their base salary and one that pays employees 9% of their base salary.
Today’s filing further notes that BlockFi was “authorized, but not directed,” to implement this employee retention program. Although the company is apparently not required to pay any or all of its employees, it will have to make the last of the three payments within 12 months of court approval if it chooses to continue with the retention plan.
The court filing did not indicate how many employees are eligible for the bonus. However, recent reports suggest that the company currently has around 125 employees.
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 company employees play a critical role in returning assets to investors.
BlockFi’s decision to pay its staff will no doubt be controversial as it has yet to fully reopen customer withdrawals. In December, the company began taking court action to reopen essential wallet withdrawals while leaving interest-bearing wallets closed. Either way, all wallets seem to remain frozen as of January 27.
BlockFi’s bankruptcy proceedings take place in the United States Bankruptcy Court for the District of New Jersey. Judge Michael Kaplan is overseeing the case.