Just days after a creditor offered to help Core Scientific avoid possible bankruptcy, reports have emerged confirming the fate of the bitcoin (BTC) mining company. As reported, Core Scientific has filed for Chapter 11 bankruptcy protection in Texas due to falling revenue and low bitcoin prices.
On December 14, financial services platform B. Riley offered to provide Core Scientific with $72 million in non-cash funding—$40 million with no contingencies and $32 million with conditions—to maintain value for stakeholders. The decision was made after Core’s valuation fell from $4.3 billion in July 2021 to $78 million at reporting time.
As a direct result of a prolonged bear market, Core Scientific had to sell 9,618 BTC in April to stay operational.. A CNBC report quoted a person familiar with the company’s finances as saying the bitcoin mining company would file for Chapter 11 bankruptcy early on December 21.
Although the company continues to generate positive cash flows, revenues are not enough to cover operating costswhich involve paying the lease for your bitcoin mining equipment.
The report also suggests that Core Scientific will continue with its mining operations and has no liquidation plans. When B. Riley offered a loan, the company’s stock momentarily rose nearly 200%, but has since experienced a steady decline.
On October 26, a statement from Core Scientific to the US Securities and Exchange Commission indicated financial difficulties. According to the company, the main reasons for this situation were low bitcoin prices, rising electricity costs, rising global bitcoin hash rate, and the bankruptcy of cryptocurrency lender Celsius, which canceled its debts owed to Core Scientific.
Core Scientific has not yet responded to Cointelegraph’s request for comment.
the tech giant Microsoft recently restricted its cloud users from mining cryptocurrencies as a measure to increase the stability of its cloud services.
As Cointelegraph reported, Microsoft updated its acceptable use policy on December 1 to clarify that “mining of cryptocurrency is prohibited without prior approval from Microsoft.”.
The company said that its intent was to protect customers by reducing the risk of interruption or deterioration of Microsoft cloud services.
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