A federal court has received a petition for bankruptcy protection under Chapter 11 from the cryptocurrency mining company Compute North.
The decrease in the price of bitcoin combined with the increasing cost of electricity has made it difficult for the bitcoin mining hosting service to stay in business. Thursday was the day when the petition was submitted to the United States Bankruptcy Court for the Southern District of Texas by Compute North.
According to the claims made by the corporation in the petition, “once any administrative expenditures are paid, there will be no money left for distribution to unsecured creditors.”
The head of marketing and sustainability at the firm, Kristyan Mjolsnes, indicated that the organisation is looking for “the chance to stabilise its business and conduct a full restructuring process.”
Mjolsnes continued by saying that as a result of this, the company would be able to “continue serving our clients and partners and make the required expenditures to fulfil our strategic goals.”
The corporation has been able to run out of money despite the fact that it has both customers and funds.
According to the documents submitted with the bankruptcy petition, Compute North asserts that both its estimated liabilities and estimated assets total between $100 million and $500 million.
The business was able to finance its new bitcoin mining data centres by raising $385 million earlier this year via a combination of stock and loan capital. Mercuria, a worldwide energy and commodities trading corporation, Generate Capital, an infrastructure investment firm, and other investors contributed a combined total of $85 million to the company in the form of stock finance. While $300 million came from Generate Capital.
Post Road Group, an investment firm located in the United States, has also contributed $25 million to the business. According to The Block’s reporting from July, Compute North had intended to raise its capacity by 1.2 gigawatts over the course of the next 12 months.
Compute North has had some of the largest bitcoin mining companies as customers, such as Marathon, which just recently began energization at a colocated 280-megawatt bitcoin mining complex in West Texas. Compute North is located in the Midwest. In July, the two businesses also reached an agreement for an additional 42 megawatts of hosting capacity.
“It is our belief, based on the information that is now accessible to us, that this submission will not have any effect on the mining activities that we are currently doing. While the hosting provider is working through this procedure, we are maintaining open lines of contact with them and monitoring their progress “a representative for Marathon said.