BlockFi has been actively seeking court approval to pay retention bonuses to certain employees to prevent a mass exodus. The company filed a 14-page witness declaration with the U.S.
Trustee and the creditors’ committee on Jan. 23, 2023, to support the petition. The proposed retention bonuses range from 10% to 50% of the employees’ salaries.
The court’s decision is pending. In the meantime, BlockFi has experienced some personnel loss. Since the petition filing last November, 11 employees have left BlockFi.
Meanwhile, rival crypto lender Celsius has been granted approval to pay staff assisting with the bankruptcy process. In December 2022, the company had lost about 200 employees.
Critics argue that retention schemes of bankrupt crypto companies are draining critical liquidity.
They point to FTX’s new CEO John J. Ray III and his staff, who are charging exorbitant fees that could have been used to reimburse bereft FTX customers who lost access to their crypto after the exchange paused withdrawals in the face of a sudden liquidity crisis on November 11, 2022.
As BlockFi awaits the court’s verdict, the future of the company and its employees remain uncertain.