Megan Crowell, director of people at crypto lending firm BlockFi, has asked a court to allow bonuses for “key employees” amid Chapter 11 bankruptcy proceedings.
In a Jan. 23 statement to the United States Bankruptcy Court for the District of New Jersey, Crowell said that without providing certain financial incentives, BlockFi might not be able to retain employees in a "highly competitive" crypto industry. According to the BlockFi executive, it was "highly likely that many employees would leave the company" in the midst of the Chapter 11 process without "competitive compensation," which could drive up costs in the future.
“The war for talent is still raging and Participants have many opportunities inside and outside of the cryptocurrency industry,” Crowell said. "Individuals with cryptocurrency expertise are attractive to employers in the payment platform, technology, and general finance industries, among others, especially as these industries tailor their products and services to incorporate cryptocurrency and related technologies."
She added:
“Should more Participants resign, I believe Debtors would have a hard time finding suitable candidates who could operate the BlockFi platform effectively, severely limiting Debtors' options in these chapter 11 cases. Additionally, hiring new employees would require the Obligors to incur significant operating and financial costs.”
FiBlock declared bankrupt on November 28, saying that at that time the company had approximately $257 million available and filed a motion to "establish a Key Employee Retention Plan to ensure the company retains skilled internal resources for critical business functions" as the works they did not qualify for breakup. According to Crowell, the proposed plan would offer employees bonuses of 20% to 50% of their salaries if they remain with the company after January 31.
Related: BlockFi's bankruptcy filing triggers a wide range of community reactions
Crowell reported that certain "critical" employees had already accepted offers at Google, Block and Walmart following bankruptcy filings in November, in some cases "for compensation significantly higher than their current compensation." Her LinkedIn showed that she joined BlockFi in July 2019, working in various roles related to recruiting talent.
Many crypto companies including FTX, Celsius Network, Genesis, and Voyager Digital filed for Chapter 11 bankruptcy in the past year, with many users reporting losses totaling millions of dollars.
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