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    Home»Crypto»One of the Biggest Bitcoin Miners, Core Scientific, Files for Bankruptcy Protection
    Crypto

    One of the Biggest Bitcoin Miners, Core Scientific, Files for Bankruptcy Protection

    The publicly traded miner submitted a Chapter 11 petition to the bankruptcy court for the Southern District of Texas.
    NxtvertexBy NxtvertexDecember 21, 2022Updated:December 21, 2022No Comments3 Mins Read
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    Image Credits: [Core Scientific's Marble facility in North Carolina. (Core Scientific)]
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    One of the biggest bitcoin miners by computer power, Core Scientific (CORZ), filed for bankruptcy as the crypto winter continued to have a negative impact on the market.


    The business filed for bankruptcy under Chapter 11 in the Southern District of Texas. According to the petition, the miner’s projected liabilities range from $1 billion to $10 billion. It has between 1,000 and 5,000 creditors, with investment bank B. Riley holding the largest unsecured claim.


    According to the filing, the miner’s assets are worth between $1 billion and $10 billion.


    The greatest bankruptcy to date, Core Scientific’s is expected to have a profound impact on an already collapsing sector. Core Scientific accounts for 10% of the bitcoin network’s computing capacity, managing 143,000 mining operations and hosting another 100,000.


    In late October, the company issued its first bankruptcy warning and announced it would stop making some loan payments. This news caused its shares to drop by roughly 80% on Nasdaq. It stated once more in November that it might not have enough cash by the end of the year. The miner has been engaged in negotiations that appear to have fallen through to restructure its debt and raise financing.


    Investment bank B. Riley put out a financing plan for $72 million last week, including $40 million in funding that would be provided “soon” and with “zero contingencies.” The remaining funds would be made accessible after the price of bitcoin reached $18,500, though. Core Scientific has an excess of $42 million in the bank.


    Core Scientific is one of several miners battling to stay afloat as growing energy costs drive up expenses while persistently low bitcoin prices drive down profits. Another significant company in the sector, Compute North, filed for Chapter 11 bankruptcy in late September. About 72% of Core Scientific Iris Energy’s (IREN) processing power, which was connected to more than $100 million in loans that it missed payments on, had to be disconnected as a result of its bankruptcy. Special-purpose non-recourse vehicles held the loans. Blockchain by Argo (ARBK). Greenidge Generation (GREE) yesterday signed a debt restructuring agreement with its lender NYDIG, but if it doesn’t get new capital, it might still run out of money in two months.


    One of Core Scientific’s main clients, lender Celsius’s mining division, as well as lender BlockFi, to whom it owes $54 million, have both filed for bankruptcy. In July, Celsius Mining filed for Chapter 11 bankruptcy. In September, Celsius Mining sued Core Scientific, alleging that the latter had broken the terms of the automatic stay. According to Core Scientific, as of September 30, Celsius owes it $5.2 million. One of several victims of the collapse of cryptocurrency exchange FTX, BlockFi filed for Chapter 11 bankruptcy in late November.


    According to the filing, Core Scientific was operating 243,000 computers at the end of October, with 14.4 exahashes per second (EH/s) of bitcoin self-mining hashrate and 10 EH/s of hosted machines for other businesses. That amounts to around 10% of the current global hashrate, which is estimated to be around 243 EH/s.


    After merging with Power & Digital Infrastructure Acquisition in a special purpose acquisition company (SPAC) transaction, the company went public on January 20.

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