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Bitcoin Mining Firm Compute North Files for Chapter 11 Bankruptcy –

Bitcoin Mining Firm Compute North Files for Chapter 11 Bankruptcy –

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Compute North Holdings, a company that provides data center services to cryptocurrency miners and blockchain companies, filed for bankruptcy in Texas.

Compute North files for bankruptcy

Bitcoin mining service company Compute North has filed for Chapter 11 bankruptcy, citing increasing pressure on the company as a result of the effects of the crypto winter and increased energy costs. The company’s CEO, Dave Perrill, has also resigned from his position, but remains on the board.

The company filed for Chapter 11 bankruptcy on Sept. 22 in the U.S. Bankruptcy Court for the Southern District of Texas, which is currently pending before Judge David Jones.

A Chapter 11 filing allows a business to continue operating while it develops a plan to repay creditors. According to the statement, Compute North owes about $500 million to 200 creditors, with assets valued between $100 million and $500 million.

Compute North provides large-scale crypto mining hosting services and infrastructure, as well as hardware and a Bitcoin mining pool. It is one of the largest data center providers in the US and has prominent partners in the Bitcoin mining industry, including Compass Mining and Marathon Digital.

Both companies have issued a statement on Twitter stating that based on currently available information, their business will continue as normal.

“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.” considered Compass Mining.

A costly setback in the Texas mining district

The bearish trend of Bitcoin in 2022 has greatly affected the mining industry this year, and in the context of Texas, rising energy bills and several power outages during severe heat waves have also been unfavorable.

According to Bloomberg Business reporter David Pan, Compute North may have suffered a costly delay to a large mining area in Texas that it was unable to monetize for months. He remarked:

“Compute North’s massive 280MW mining facility in TX was supposed to start up equipment in April, but couldn’t due to pending approvals. From then until this year, when it was finally able to refresh the machines, Bitcoin prices had gone through several down cycles, fundraising opportunities dried up, and large lenders dwindled.”

Compute North joins a long line of crypto entities that have either succumbed to crypto winter or helped create it, such as Voyager Digital, Three Arrows Capital, Celsius Network, and BlockFi.

On July 14, Celsius Network’s mining division, which announced its public offering in March, filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Southern District of New York along with its parent company. Poolin Wallet, one of the largest bitcoin (BTC) mining pools, announced on September 13 that it will issue IOU (I Owe You) tokens to affected users as withdrawals were frozen the previous week.

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