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Blockfi crypto lender in bankruptcy is ready to offer some employees a retention bonus of 10% to 50% because it seeks to prevent a massive EXODUS of employees.
According to the chief of staff of blockfi megan cromwell, blockfi is likely to lose more talent unless the court approves a detention petition filed on November 28, 2022.
BlockFi is moving towards Stem Employee Exodus.
“While we felt these extensions prudent to allow for dialogue with the U.S. Trustee and the Committee, we have experienced both additional personnel loss and increased concern regarding the receipt (and timing) of retention payments,” Cromwell said in a 14-page witness declaration filing early on Jan. 23, 2023, which both the U.S. Trustee and the creditors’ committee have opposed.
BlockFi, a crypto lender now bankrupt through chapter 11, wants the tribunal to approve bonuses to hold employees?? pic.twitter.com/uVcld7oxOR
— Barchart (@Barchart) January 23, 2023
As of last November, 11 employees have left BlockFi.
The FTX recently opposed BlockFi's claim to the shares of Sam Bankman-Fried Robinhood, backed with a BlockFi loan to Alameda Research, an FTX market specialist. Subsequently, the United States Department of Justice began to seize the actions.
Celsius and BlockFi Retention Schemes a Hot Topic
BlockFi is not alone in trying to retain top talent in the midst of bankruptcy proceedings.
Lender Celsius, which filed for bankruptcy in mid-2022, recently secured approval to pay staff assisting with the bankruptcy process. As in the case of the blockfi retention program, Celsius targeted retention payments for employees in the $25,000 to $425,000 range. By the beginning of December 2022, the business had lost approximately 200 employees.
Retention schemes of bankrupt crypto companies have been under the spotlight recently for draining critical liquidity.
New ftx Chief Executive Officer John J. III and his staff have been criticized for charging exorbitant fees that could be 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 Nov. 11, 2022.
Gemini makes 10% of its employees redundant.
In order to avoid insolvency, other firms used substantial job losses.
Information that was reported in January. 23 that Gemini exchange would cut 10% of its staff in another round of layoffs
“It was our hope that after the summer there would be no further cuts, however, persistent negative macroeconomic conditions and unprecedented fraud perpetuated by bad actors in our industry have left us with no other choice but to revise our outlook and further reduce headcount,” the exchange’s co-founder Cameron Winklevoss in an internal staff message.
Winklevoss has been locked into a highly publicized battle with the bankrupt lender genesis global capital for his alleged mismanagement of Gemini-owned funds earning customers.
Genesis used to earn clients' funds to loan over the long term and in turn, provided them with higher interest rates than most banks. Gemini would have collected as much as 4.29% of all interest earned in brokering the relationship between earning clients and Genesis.
Genesis also recently reduced its headcount by 30% shortly before it filed for bankruptcy, while U.S. exchange COINBASE has laid off more than 2,000 workers in the last seven months.
