According to a new filing with the US Securities and Exchange Commission on Nov 7, Bitcoin miner Iris Energy says it has received a default notice from Bitmain Technologies, one of the world’s largest manufacturers of Bitcoin mining machines.
The notice alleged Iris Energy failed to engage in “good faith restructuring discussions” for payments due on Nov 8. In addition, Iris Energy received a separate notice last week from its lenders that the company failed to maintain sufficient insurance, which would result in default if not remedied within 10 days.
Headquartered in Australia, Iris Energy is known for operating Bitcoin mining centers mainly in Canada that use entirely renewable energy. In October 2022, the company had an average mining rate of 3.9 EH/s, which is about 1.5% of the Bitcoin network’s mining capacity. The three debt facilities in dispute are $1 million, $32 million, and $71 million worth of equipment financing loans secured by mining rates of 0.2 EH/s, 1.6 EH/s and 2.0 EH/s of Bitcoin miners. Even so, Iris Energy insists that 2.4 EH/s of miners and all of the company’s data center capacity and development pipeline are not affected.
It seems that high electricity costs combined with the falling Bitcoin price and increasing network difficulty have put Iris Energy on hard times. Despite having $53 million in cash and generating over $8.7 million in revenue per month, the company revealed that its gross profit is only $2 million monthly at the moment, much lower than the monthly principal and interest payments of $7 million.
Not only Iris Energy, Bitcoin mining giant Core Scientific is also on the verge of default due to a lack of liquidity in the amount of cash the company holds.
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