Bitcoin mining firm Compute North files for bankruptcy, CEO resigns
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Bitcoin (BTC) mining data center operator Compute North filed for Chapter 11 bankruptcy, adding that CEO Dave Perrill resigned earlier in September.
The company reportedly owes $500 million to about 200 creditors and has assets of between $100 million and $500 million.
Compute North filed for bankruptcy September 22nd and continues to operate as it seeks solutions to its liquidity problem. Meanwhile, CEO Dave Perrill will remain on the board, while COO Drake Harvey will take over as CEO.
Compute North is one of the largest data center operators for crypto miners and has partnerships with major mining companies such as Marathon Digital and Compass Mining. It raised $385 million in February — $300 million in debt financing and $85 million in its Series C equity financing.
North Compute’s source of income was declining
The company saw its fortunes rise after a massive market downturn that dropped the value of Bitcoin below $20,000. Additionally, rising energy costs and the increasing difficulty of mining BTC have made it difficult for miners to remain profitable.
Bloomberg business reporter David Pan tweeted that one of the reasons for Compute North’s bankruptcy was the delay in commissioning its 280mw mining facility in Texas – mainly due to approval issues.
While Compute North’s bankruptcy demonstrates the systemic distress of the Bitcoin mining industry, it is also the result of various idiosyncratic risks. 1) Hosting companies that build data centers to use miners’ equipment have to strike a very delicate balance
– David Pan (@DavidPan_1) 23 September 2022
“[North Compute]The company’s bankruptcy shows the growing anxiety in Bitcoin mining.
Count the northern partners unchanged
Compute North partners have revealed that their operations will not be affected by the company’s bankruptcy.
Bitcoin mining companies – Marathon Digital and Compass Digital – tweeted that their mining operations will not be affected by the bankruptcy of the data center operator.
An application related to one of our hosting services was published today. Based on the information currently available, we understand that this application will not affect our current mining operations.
— Marathon Digital Holdings (NASDAQ: MARA ) (@MarathonDH) 22 September 2022
Compute North staff announced today that the bankruptcy filing should not disrupt the business. We will continue to monitor the situation and provide more information as it becomes available.
— Compass Mining 🧭 (@compass_mining) 22 September 2022
Compute North is the first cryptomining company to file for bankruptcy. Meanwhile, several crypto lenders such as Celsius Network, Voyager Digital and others had previously filed for bankruptcy.