The move by BlockFi to offer retention bonuses to certain employees is a last-ditch effort to prevent a mass exodus of talent while it navigates the bankruptcy process.
The U.S. Trustee and creditors’ committee have opposed the retention petition, and BlockFi has already lost 11 employees since filing for bankruptcy.
This situation is not unique to BlockFi, as other bankrupt crypto companies such as Celsius have also sought to retain staff assisting with the bankruptcy process.
However, such retention schemes have come under scrutiny for draining critical liquidity. The new CEO of FTX, John J. Ray III, and his team have been criticized for their high fees, which have deprived customers of access to their crypto.
These fees could have been used to reimburse customers who were locked out of their accounts when the exchange paused withdrawals due to a liquidity crisis.
It remains to be seen how the U.S. Trustee and creditors’ committee will rule on BlockFi’s retention petition, and whether the company will be able to retain its talent.
If BlockFi is able to secure approval, it will be a major victory for the company in its efforts to emerge from bankruptcy.