BlockFi, a bankrupt cryptocurrency lender, wants the court to approve employee bonuses, claiming that the industry war for talent is still ongoing.
BlockFi, a bankrupt cryptocurrency lender, requested court clearance on Monday to pay bonuses to its staff because it wants to retain skilled workers while it works on restructuring and because employees have already been enticed away by attractive offers.
“The demand for workers with the education and expertise required to run an advanced bitcoin trading platform is fiercely competitive. The participants have a variety of prospects both inside and outside the bitcoin industry, and the talent war is still going strong “
Megan Crowell, the chief people officer, made this statement in a document submitted to the District of New Jersey bankruptcy court on January 23.
Due to its significant exposure to the defunct crypto exchange FTX in November, the company filed for Chapter 11 bankruptcy protection.
Crowell stated in the filing on Monday that BlockFi has lost 11 employees, and that the rate of resignations has increased this month. She stated that “key workers continue to receive proposals for remuneration that are, in some cases, far beyond their existing compensation.”
Jobs in the cryptocurrency business and outside of it are being offered to BlockFi employees; successful departures from BlockFi include Google, payment processor Block, and Walmart.
According to Crowell, who joined BlockFi in October, “approval of the Retention Programs is vital to prevent much further turnover of key personnel that would create an unsustainable strain on the Debtors.”
In November, BlockFi testified before the court that keeping hold of key personnel was essential to its efforts to reorganize and, eventually, to its sustainability as a trading platform. With the help of its retention program, it hopes to keep “crucial” employees on board by paying them 10% or 50% of their base pay.
The US Trustee and the official committee of unsecured creditors both filed responses opposing BlockFi’s motion on January 10.
“The Committee does not, in principle, object to the Retention Programs,” the statement read. The Committee is aware that some important people are required to support the restructuring strategy and retain value and must be motivated to continue working. However, every dollar wasted from these programs reduces the amount distributed to creditors.”
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