Megan Crowell, chief human resources officer at crypto-lending firm BlockFi, has asked a court to allow bonuses for “key employees” amid Chapter 11 bankruptcy proceedings.
In a Jan. 23 filing for the United States Bankruptcy Court for the District of New Jersey, Crowell said that without providing certain financial incentives, BlockFi may not be able to retain employees in the “highly competitive” crypto industry. According to a BlockFi executive, many employees are “highly likely to leave the company” in the middle of the Chapter 11 process without “competitive compensation,” which could increase costs in the future.
“The war for talent remains active and there are many opportunities for entrants in the cryptocurrency sector and beyond,” said Crowell. “Individuals with cryptocurrency experience are attractive to employers in the finance, technology, and payment platform industries, among others, especially because these industries are adapting their products and services to include cryptocurrencies and related technologies.
“In the event that additional Participants withdraw, I believe the Debtors would have difficulty adequately sourcing candidates to effectively operate the BlockFi Platform, significantly limiting the Debtors’ options in these Chapter 11 cases. In addition, hiring new employees would require , so that the borrowers incur significant operating and financial costs.’
BlockFi filed for bankruptcy Nov. 28, saying the firm had roughly $257 million in cash on hand at the time and filed a proposal to “establish a key employee retention plan to ensure the company retains trained internal resources for critical business functions” because the jobs did not qualify for severance pay. According to Crowell, the proposed plan would offer employees bonuses of 20-50% of their salaries if they remained with the company through Jan. 31.
Crowell said some “critical” employees have already accepted offers at Google, Block and Walmart after the November bankruptcy filing, in some cases “for compensation significantly in excess of their current compensation.” Her LinkedIn showed that she joined BlockFi in July 2019 and worked in various roles related to talent acquisition.
Many crypto firms including FTX, Celsius Network, Genesis and Voyager Digital filed for Chapter 11 bankruptcy in the last year, with many users reporting losses totaling millions of dollars.