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Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia.

Bitcoin miner Bitfarms (BITF) might have already, or may in the future, stop making installment payments on a $20 million loan from bankrupt crypto lender BlockFi, effectively defaulting on the loan, the firm said in a press release on Friday. As a result, Bitfarms is looking to modify the loan.

The original loan for $32 million was signed in February 2022 by Backbone Mining Solutions, a Bitfarms company that operates a 20 megawatt (MW) mining site in Washington state.

The loan now has $20 million outstanding and is secured by only $5 million in assets, in the form of some mining machines and the bitcoin they produce. So the miner is looking for more favorable terms on the loan and reducing its obligations.

"Neither a restructuring on more beneficial loan terms nor a reduction in BMS’s indebtedness is assured," the Friday press release said.

Canada-based Bitfarms has been working to reduce its loans, but still has $47 million outstanding, including the loan with BlockFi.

Miners have been haunted by their heavy debt obligations in a bear market that has seen the value of their collateral, usually crypto assets and mining machines, plummet. Two of the biggest firms in the industry, Compute North and Core Scientific (CORZ), have filed for Chapter 11 bankruptcy protection.

As of the end of 2022, Bitfarms had $36 million in cash and unencumbered crypto.

The stock is down over 5% at 95 cents in pre-market trading.

Read more: Crypto Miners Face Margin Calls, Defaults as Debt Comes Due in Bear Market

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Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia.

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Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia.

Ant Miner S9 Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated. The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.