Bitfarms, a company that mines Bitcoin (BTC), has met its financial obligations to BlockFi, ending the short-lived business agreement it had with the now-defunct cryptocurrency lender.

Bitfarms said on February 9 that it has completed its debt obligations to BlockFi in the amount of $21 million in exchange for a one-time cash payment of $7.75 million. This news came shortly after Bitfarms received the cash payment. After Bitfarms issued a warning that it could default on the loan it had taken out with BlockFi, the deal closed a few weeks after the warning was given.

According to statements made by Bitfarms CFO Jeff Lucas, this fruitful discussion and agreement brings our debt reduction efforts one step closer to completion. This successful negotiation and agreement helps advance our goals, especially when considered in conjunction with the prior reorganization and the completion of our capital expenditure obligations in December.

Backbone Mining Company, which is located in the state of Washington and is a wholly owned subsidiary of Bitfarms, serves as the critical point of connection between the two companies, Bitfarms and BlockFi. Backbone Mining received a $32 million loan from BlockFi in February 2022 to support the purchase of equipment. As of January 31, 2023, the total principal amount of the loan and interest still due was $21 million.

As a consequence of the agreement, all of Backbone’s assets, which currently comprise 6,100 miners, are free and clear of any encumbrances or encumbrances that may have been previously encumbered on them.

BlockFi filed its petition to file for Chapter 11 bankruptcy on November 28, just a few weeks after cryptocurrency exchange FTX crashed. The lender’s fate seemed tied to the success of Sam Bankman-crypto Fried’s business in July 2022, when FTX US provided him with a $240 million ransom package.