Bitcoin Mining Giant Core Scientific Files for Chapter 11 Bankruptcy
Core Scientific, the world’s largest publicly-traded crypto miner based out of the United States is ultimately filing for Chapter 11 bankruptcy in Texas on Wednesday morning.
Core Scientific joins the list of other crypto miners who have succumbed to the crash in the crypto space and the soaring energy prices. A month ago, the Bitcoin miner had already hinted about extreme pain in its operations and cash crunch owing to the market conditions.
Core Scientific was mining some proof-of-work digital assets such as Bitcoin. As we know, this requires high-end machinery and hardware while also consuming massive electricity in the process. Over the last year, the price of Core Scientific (NASDAQ: CORZ) stock has tanked by 99% losing more than $4 billion in valuations.
Last year in July 2021, the Bitcoin miner had gone for a public listing via a special purpose acquisition vehicle or SPAC. Although the company still generates a positive cash flow, it’s not enough to repay the financial debt on equipment, said sources familiar with the matter.
Core Scientific’s Further Action Plan
The sources also added that core Scientific is not willing to liquidate, however, it would continue to operate normally while reaching a deal with senior security noteholders, who hold a majority of the company’s debt.
In their filing earlier in October, Core Scientific said that holders of their common stock might suffer a total loss on their investment. However, the Bitcoin miner’s deal with its convertible note holders is such that if the market conditions for Bitcoin improve, common equity holders might not get totally wiped out.
Core Scientific has operations currently in North Dakota, North Carolina, Georgia, and Kentucky. It is also one of the largest providers of blockchain infrastructure and hosting.
Core Scientific is not the only Bitcoin miner to face bankruptcy. Compute North, the hosting infrastructure for crypto mining also filed for bankruptcy in September.
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