According to a new filing with the U.S. Securities and Exchange Commission on Nov. 7, Bitcoin (BTC) miner Iris Energy said it has received a default notice from the market’s leading miner manufacturer Bitmain Technologies.
Iris Energy is alleged for failing to enter into restructuring discussions in good faith for certain principal payments due on Nov 8. Additionally, Iris Energy received a separate notice last week from creditors that the company did not maintain sufficient insurance coverage and was at risk of default if not remedied within 10 days.
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 was about 1.5% of the Bitcoin network’s mining capacity.
The company’s three disputed debt facilities are $1 million, $32 million, and $71 million in equipment financing loans secured by mining rates of 0.2 EH/s, 1.6 EH/ s and 2.0 EH/s of Bitcoin.
Despite the tough situation, Iris Energy insisted that the 2.4 EH/s of miners and all of the company’s data center capacity and development pipeline are not affected.
In total, it seems that the combination of high electricity costs, falling Bitcoin prices, and increasing network difficulty has 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 in current conditions, much lower than with monthly principal and interest payments of $7 million.
However, not only Iris Energy is affected by the current situation, last week many statistics showed that the leading Bitcoin mining company Core Scientific is also on the verge of default due to a lack of liquidity in the amount of holding cash.
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