Amid the mining industry struggling with Bitcoin volatility and escalating electricity costs, Compute North filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas.
Chapter 11 filings allow a company to keep operating while it develops a plan to repay creditors. The company filed bankruptcy to stabilize its business while it restructures under court protection, Kristyan Mjolsnes, Compute North’s head of marketing and sustainability, said in an email.
Compute North has between $100 million and $500 million in both liabilities and estimated assets, according to filings. The company has raised $385 million, including $85 million in Series C equity and $300 million in debt financing for new Bitcoin mining data centers.
At the end of July, Compute North Founder and CEO Dave Perrill announced plan to increase mining capacity by 1.2 gigawatts over the next 12 months.
Via a statement on Twitter, the company confirmed that with the information they have at this stage, their business operations will continue as normal.
“Compute North’s staff informed us today that the bankruptcy filing should not disrupt business operations. We are continuing to monitor the situation and will provide further updates as they become available,” noted Compass Mining.
Compute North’s client list includes one of the biggest Bitcoin miners, Marathon, which recently started powering a 280-megawatt giant Bitcoin mining facility in western Texas. The two companies also closed a deal to provide 42 megawatts of storage in July.
With the current market downturn, miners are probably the hardest hit. Many of those have sold off their BTC and liquidated equipment to cover their debts. Cryptocurrency miners across North America are facing a debt burden of up to $4 billion as the value of their mining output declines along with the market price of Bitcoin.
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