BlockFi exec argues bankruptcy court should approve bonuses to retain talent

Published at: Jan. 23, 2023

Megan Crowell, the chief people officer at crypto lending firm BlockFi, has petitioned a court to allow bonuses for “key employees” amid Chapter 11 bankruptcy proceedings.

In a Jan. 23 declaration for United State Bankruptcy Court in the District of New Jersey, Crowell said without giving certain financial incentives, BlockFi might be unable to retain employees in a “highly competitive” crypto industry. According to the BlockFi executive, many staff were “highly likely to leave the company” amid the Chapter 11 process without “competitive compensation”, potentially adding to costs down the road.

“The war for talent remains active, and the Participants have many opportunities inside and outside the cryptocurrency sector,” said Crowell. “Individuals with cryptocurrency experience are attractive to employers in the finance, technology, and payment platform industries broadly, among others, especially as these industries adapt their products and services to incorporate cryptocurrency and or related technologies.”

She added:

“In the event additional Participants resign, I believe that the Debtors would struggle to adequately source candidates who could operate the BlockFi platform effectively, severely limiting the Debtors’ options in these chapter 11 cases. Moreover, hiring new employees would require the Debtors to incur significant operational and financial costs.”

BlockFi filed for bankruptcy on Nov. 28, saying at the time the firm had roughly $257 million on hand and filed a motion to “establish a Key Employee Retention Plan to ensure the company retains trained internal resources for business-critical functions” as the works did not qualify for severance. According to Crowell, the proposed plan would offer employees bonuses of 20-50% of their salaries should they remain at the firm as of Jan. 31.

Crowell reported that certain “critical” employees had already accepted offers at Google, Block, and Walmart following the bankruptcy filing in November, in some cases “for compensation significantly above their current compensation”. Her LinkedIn showed she joined BlockFi in July 2019, working in various roles related to recruiting talent.

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 in the millions of dollars.