BlockFi authorised to pay 10 million in bonuses

Bankrupt crypto loan company BlockFi has been granted court permission to pay about $10 million in bonuses to employees, according to a 27 January statement.

The document does not use the word 'bonus'. Instead, it refers to a staff retention programme and describes additional payments on top of basic pay.

The programme will see BlockFi pay up to $9.98 million to a few remaining employees.

The amount will be distributed to employees in three instalments. There will be two tiers of payment: one that pays employees 42.5% of their base salary amount and one that pays employees 9% of their base salary amount.

Today's statement also states that BlockFi has been 'authorised, but not directed', to implement this staff retention programme. While the company will presumably not be obligated to pay all or any of its employees, it will have to complete the last of three payments within 12 months of court approval if it chooses to proceed with the retention plan.

The court document did not specify how many employees are eligible for the bonus. However, recent reports suggest that the company currently has about 125 employees.

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

BlockFi's decision to pay its employees will undoubtedly be controversial, as it has not yet fully reopened customer withdrawals. In December, the company took steps in court to reopen withdrawals of core portfolios, leaving profitable portfolios closed. However, all portfolios appear to remain frozen as of 27 January.

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