Bankrupt crypto lender BlockFi wants the court to approve employee bonuses as it says the industry war for talent rages on
- Bankrupt crypto lender BlockFi wants court approval to pay bonuses to its employees.
- "The war for talent remains active," the company said, with employees being lured away inside and outside the crypto industry.
Bankrupt crypto lender BlockFi on Monday sought court approval to pay bonuses to its employees, saying it needs to hold onto experienced workers as it works on reorganizing, with workers already being lured away through lucrative offers.
"The labor market for employees who possess the qualifications and skills necessary to operate a sophisticated cryptocurrency trading platform is highly competitive. The war for talent remains active, and the Participants have many opportunities inside and outside the cryptocurrency sector," Chief People Officer Megan Crowell said in a January 23 filing with the Bankruptcy Court in the District of New Jersey.
The company filed for Chapter 11 bankruptcy protection in November stemming from its heavy exposure to crypto exchange FTX, which collapsed that month.
Crowell said in Monday's filing that 11 employees have resigned from BlockFi and resignations have accelerated this month. "Key employees continue to receive offers, in some instances, for compensation significantly above their current compensation," she said.
BlockFi employees are being offered jobs within the crypto industry and outside of it, with Google, payment process Block and Walmart as examples of companies successfully recruiting away from BlockFi.
"Approval of the Retention Programs is necessary to prevent significantly more attrition of key employees that would place an unsustainable strain on the Debtors," said Crowell, who took on her position at BlockFi in October.
BlockFi told the court in November that holding onto key employees was critical to its efforts to reorganize and, ultimately, its viability as a trading platform. Its retention program is aimed at offering "crucial" staffers compensation based on 50% of their base salary or compensation based on 10% of their base salary.
Pushback to BlockFi's motion have come from the US Trustee and the official committee of unsecured creditors in separate filings on January 10.
"The Committee does not object, in principle, to the Retention Programs," it said. "The Committee understands the need for certain key employees to be incentivized to stay on to aid the restructuring effort and preserve value. But every unnecessary dollar paid from these Programs diminishes distributions to creditors."