Bitcoin (BTC) mining hosting company Compute North has filed for Chapter 11 bankruptcy amid mounting pressure on the company from the effects of the crypto winter and rising energy costs. The company’s CEO, Dave Perrill, has also stepped down but will remain on the board.
The company on Thursday filed for Chapter 11 bankruptcy with the United States Bankruptcy Court for the Southern District of Texas, which is currently pending before Judge David Jones.
Under a Chapter 11 filing, the business is still able to continue operations while developing a plan to repay creditors. The filing reportedly says Compute North owes around $500 million to 200 creditors, while its assets are worth between $100 million and $500 million.
Compute North offers large-scale crypto 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 well-known partners in the BTC mining sector, such as Compass Mining and Marathon Digital.
Both companies released statements via Twitter, noting that with the information they have at this point, business operations will continue as normal.
“Compute North staff advised us today that the bankruptcy filing is not expected to disrupt business operations. We continue to monitor the situation and will provide further updates as they become available,” Noted Mining compass.
Today, a file related to one of our hosts was published. Based on the information available at this time, we understand that this filing will not impact our current mining operations.
— Marathon Digital Holdings (NASDAQ: MARA) (@MarathonDH) September 22, 2022
BTC’s bearish 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 haven’t helped 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 mining facility in Texas that it hasn’t been able to monetize for months.
“Compute North’s massive 280MW mining facility in Texas was supposed to run rigs in April, but was unable to due to pending approvals. From then until the end of this year, when he was finally able to power up the machines, Bitcoin prices went through several downward cycles, fundraising opportunities dried up, and major lenders been reduced,” he wrote.
Compute North joins a long list of crypto firms that fell victim to the crypto winter or, in some cases, helped create it, including Voyager Digital, Three Arrows Capital, Celsius Network and BlockFi, for n to name a few.