The bitcoin (BTC) mining hosting company Compute North has filed for bankruptcy, amid mounting pressure on the company due to the effects of the crypto winter and rising energy costs. The CEO of the firm, Dave Perrill, has also resigned from his position, but will remain on the board of directors..
The company filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of Texas on September 22.which is now pending before Judge David Jones.
Under Chapter 11, the business can continue to operate while it makes a plan to pay creditors. Compute North reportedly owes around $500 million to 200 creditors, while its assets are said to be worth between $100 million and $500 million.
Compute North offers large-scale cryptocurrency mining hosting services and facilities, hardware, and a BTC mining pool. It is one of the largest data center providers in the United States and has renowned partners in the BTC mining sectorsuch as Compass Mining and Marathon Digital.
Both companies have come out with great communications through Twitterin which they indicate that, with the information they have at this time, their commercial operations will continue as normal.
“The Compute North staff has informed us today that filing for bankruptcy should not interrupt business operations. We continue to monitor the situation and will provide further updates as they become available.” he pointed Compass Mining.
Today, a filing related to one of our hosting providers was published. Based on the information available at this time, it is our understanding that this filing will not impact our current mining operations.
— Marathon Digital Holdings (NASDAQ: MARA) (@MarathonDH) September 22, 2022
A file related to one of our hosting providers has been published today. Based on the information available at this time, we understand that this presentation will not affect our current mining operations.”
BTC’s bearish performance in 2022 has had a significant impact on the mining sector this yearAnd in the Texas context, rising energy costs and multiple power outages during intense heat waves haven’t helped either.
Bloomberg Business reporter David Pan noted on Twitter that Compute North may have been hit by a costly delay at a large mining facility in Texas that was unable to monetize for months.
“Compute North’s massive 280MW mining facility in TX was supposed to get rigs up and running in April, but couldn’t due to pending approvals. From then until later this year, when it was finally able to power the machines, bitcoin prices had gone through multiple down cycles, fundraising opportunities dried up and major lenders pulled out,” he wrote..
Compute North joins a long list of cryptocurrency companies that have fallen victim to the crypto winter — or, in some cases, helped create it.such as Voyager Digital, Three Arrows Capital, Celsius Network, and BlockFi, to name a few.
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