Crypto Mining Firm Compute North Files For Bankruptcy
- Compute North filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas on Sept. 22. and the request is pending before Judge David Jones who has yet to approve and rule on the same.
- A Chapter 11 filing ensures that the firm that has filed for it will be able to successfully continue to run its operations while it gradually repays the debt of its creditors.
- Firms like Voyager Digital and Celsius Network also filed for Chapter 11 bankruptcy recently due to macro-economic conditions and market’s bearishness.
Among the list of crypto related firms filing for bankruptcy, there has been the addition of well-known crypto mining firm Compute North. The firm filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas on Sept. 22. It seems that the bearish conditions prevailing in the market are hitting every firm quite hard.
As per the filing, the firm seems to have been under a lot of pressure that has risen from regulatory crackdown followed by rising prices of energy and a significant drop in the price of cryptocurrencies. Almost every crypto coin is down 60-90% from its all-time high and the fears of crypto winter has engulfed every sector as well.
The filing submitted by Compute North is pending before Judge David Jones who has yet to approve and rule on the same. A Chapter 11 ensures that the firm that has filed for it will be able to successfully continue to run its operations while it gradually repays the debt of its creditors. This is similar to what firms like crypto lenders Celsius and Voyager Digital have witnessed.
Interestingly, the crypto mining firm has pointed out that its current liability to its creditors is somewhere around the $500 million mark while the assets that it holds currently lie between $100 and $500 million. The crypto mining giant seems to have landed in a bit of rough spot following the recent crash in the prices of cryptocurrencies.
Compute North is a well-known giant in the crypto industry and is known for catering major clients as well. Interestingly, the firm has big name partners in the BTC mining sector such as Compass Mining and Marathon Digital both of which have been expanding aggressively amidst the bearish crypto market.
“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.
On the other hand, Marathon Digital Holdings also revealed the fact that they came to know about Compute North’s bankruptcy filing but confirmed that “based on the information available at this time, it is our understanding that this filing will not impact our current mining operations.”
Another interesting angle provided to the crypto mining firm’s bankruptcy was provided by Bloomberg Business reporter David Pan via a Twitter post. He pointed out that building mining infrastructure is capital-intensive and “Compute North’s massive 280mw mining facility in TX was supposed to run rigs in April but it couldn’t due to pending approvals. From then to later this year when it finally was able to energize the machines, Bitcoin prices had gone through multiple downward cycles, fundraising opportunities dried up and major lenders scaled back.” Hence, he concluded that these factors led to a significant decline in the firm’s operational capability.