Bitcoin Mining Firm Compute North Files for Bankruptcy
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Compute North, which happens to be the latest victim of the ongoing crypto rout, has filed for Chapter 11 bankruptcy in the US Bankruptcy Court for the Southern District of Texas.
The application is pending before Judge Bankruptcy David R Jones. The company’s CEO, Dave Perrill, also resigned earlier this month, but remains on the board.
Count the North in trouble
According to the terms of the application, the company can continue operating while it prepares a comprehensive restructuring plan to repay creditors. Compute North revealed that it owed up to $500 million to at least 200 creditors. Its assets, on the other hand, are worth between 100 and 500 million dollars.
The bankruptcy filing is expected to help stabilize its business as it carries out a restructuring process under court protection.
The filing comes seven months after the Minnesota-based cryptomining infrastructure provider secured a $385 million round that includes Series C fundraising and debt financing. Recently, it broke ground on a 300-megawatt cogeneration plant in Texas.
Compute North was launched in 2017 as a crypto mining operation. During the year, it expanded its operations to co-location services, which offer affordable power to data centers. The company is also a hosting partner of Compass Mining, another BTC mining giant. Following the development, the latter said its legal team is reviewing the bankruptcy filings and added,
“Compute North staff informed us today that the bankruptcy filing should not disrupt the business. We will continue to monitor the situation and provide more information when it becomes available.”
Mining companies are struggling
Dwindling cryptocurrency prices and rising US interest rates have adversely affected the digital asset space. Mining companies’ results have weakened strongly in the midst of a rather variable summer. Compass Mining, one, lost a few profitable mining facilities in Georgia this month.
The shutdown is due to a 50 percent increase in energy costs. The company had cited the reason as protecting miners from the excessive energy consumption recently applied by the local facility, and also revealed plans to open another facility in Texas.
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