Crypto mining firm Compute North has filed for Chapter 11 bankruptcy protection in a federal court.
The bitcoin mining hosting provider had been struggling to survive due to the decline in bitcoin pricing and rising power costs.
Compute North filed the petition in the U.S. Bankruptcy Court for the Southern District of Texas on Thursday.
“After any administrative expenses are paid, no funds will be available for distribution to unsecured creditors,” the company claimed in the filing.
Kristyan Mjolsnes, head of marketing and sustainability, stated that the company is seeking “the opportunity to stabilize its business and implement a comprehensive restructuring process.”
“(It) will enable us to continue servicing our customers and partners and make the necessary investments to achieve our strategic objectives,” Mjolsnes added.
Even though the company has revenue and capital, it has managed to go bankrupt.
According to the bankruptcy filing, Compute North claims to have between $100 million-$500 million both in estimated liabilities and estimated assets.
Earlier this year, the company raised $385 million in equity and debt funding to finance its new bitcoin mining data centres. $85 million in equity funding came from Mercuria, a global energy and commodities trading company, Generate Capital, an infrastructure investment firm, and other investors. While $300 million came from Generate Capital.
U.S.-based investment group Post Road Group had also invested $25 million in the company. According to The Block, Compute North in July planned to increase its capacity by 1.2 gigawatts over the next 12 months.
Compute North also had the top biggest bitcoin mining firms as clients, including Marathon, which recently started energization at a colocated 280-megawatt bitcoin mining facility in West Texas. The two companies also closed an additional 42-megawatts hosting deal in July.
“Based on the information available at this time, it is our understanding that this filing will not impact our current mining operations. We are in communication with the hosting provider and monitoring their progress as they work through this process,” a Marathon spokesperson said.
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