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BTC mining firm Compute North files for bankruptcy

BTC mining firm Compute North files for bankruptcy

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Bitcoin (BTC) mining hosting company Compute North has filed for Chapter 11 bankruptcy as the company faces increasing pressure from the effects of the crypto winter and rising energy costs. The company’s CEO, Dave Perrill, has also resigned, but remains on the board.

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

According to the Chapter 11 filing, the company will still be able to continue operating while it works out a plan to repay creditors. The filing says Compute North owes about $500 million to 200 creditors, while its assets are worth between $100 million and $500 million.

Compute North offers large scale crypto mining hosting services and facilities, hardware and BTC mining pool. It is one of the largest data center providers in the US and has big name partners in the BTC mining sector such as Compass Mining and Marathon Digital.

Both companies have issued statements via Twitter stating that their business will continue as normal based on the information available at this stage.

“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.

BTC’s declining performance in 2022 has had a significant impact on the mining sector this year, and in the context of Texas, rising energy costs and multiple power outages during severe heat waves have not helped either.

Related: Maple Finance launches $300 million loan pool for Bitcoin mining companies

Bloomberg Business reporter David Pan highlighted on Twitter that Compute North may have been affected by a costly delay at a major Texas mining facility that it was unable to earn for months.

“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 declined,” he wrote.

Compute North adds to a long list of crypto companies that have either fallen victim to the crypto winter – or in some cases helped create it – including Voyager Digital, Three Arrows Capital, Celsius Network and BlockFi to name a few.