Bitcoin (BTC) mining hosting company Compute North has filed for Chapter 11 bankruptcy, amid mounting pressure on the company due to the fallout from the crypto winter and rising energy costs. The company’s CEO, Dave Perrill, also stepped down but will remain on the board.
The company filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas on Sept. 22, which is now pending before Judge David Jones.
According to the Chapter 11 filing, the company is still able to continue operations as it works out a plan to repay creditors. The filing reportedly outlines that Compute North owes about $500 million to 200 creditors, while its assets are said to be between $100 million and $500 million.
Compute North offers large-scale cryptocurrency mining hosting services and facilities, hardware and BTC mining pool. It is one of the largest data center providers in the US and has well-known BTC mining partners such as Compass Mining and Marathon Digital.
Both companies have issued statements via Twitter, noting that with the information they have at this stage, their business operations will continue as normal.
“Compute North staff advised us today that the bankruptcy filing should not disrupt business operations. We continue to monitor the situation and will provide further updates as they become available.” famous Compass Mining.
Today, a filing related to one of our hosting providers was published. Based on the information available at this time, we understand that this filing will not affect current mining operations.
— Marathon Digital Holdings (NASDAQ: MARA) (@MarathonDH) September 22, 2022
BTC’s falling performance in 2022 has had a significant impact on the mining sector this year, and in the context of Texas, rising energy costs and multiple power outages during intense heat waves didn’t help either.
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Bloomberg Business reporter David Pan pointed out on Twitter that Compute North may have been affected by a costly delay at a large Texas mining facility that has been unable to generate revenue for months.
“Compute North’s massive 280MW mining facility in Texas was supposed to be operational in April but could not due to pending approvals. Between then and the end of this year, when he was finally able to turn on the machines, Bitcoin prices had gone through multiple down cycles, fundraising opportunities dried up and major lenders declined,” he wrote.
Compute North adds to a long list of crypto companies that have either fallen victim to the crypto winter – or in some cases helped create it – including Voyager Digital, Three Arrows Capital, Celsius Network and BlockFi to name a few.