Bitcoin (BTC) mining hosting company Compute North has filed for Chapter 11 bankruptcy amid mounting pressure on the company due to the effects of crypto winter and rising energy costs. The company’s CEO, Dave Perrill, has also stepped down but remains on the board of directors.
The company filed a Chapter 11 bankruptcy filing with the US Bankruptcy Court for the Southern District of Texas on Sept. 22, which is now pending with Judge David Jones.
Pursuant to a Chapter 11 filing, the company is still able to keep its operations going as it devises a plan to repay creditors. The filing reportedly outlines that Compute North owes approximately $500 million to 200 creditors, while the assets are reportedly worth between $100 million and $500 million.
Compute North offers large-scale hosting services and facilities for crypto mining, hardware and a BTC mining pool. It is one of the largest data center providers in the US and has well-known partners in the BTC mining sector such as Compass Mining and Marathon Digital.
Both companies have come out with statements via Twitter, noting that with the information they have at this stage, their business will continue as normal.
“Compute North employees informed us today that the bankruptcy filing must not disrupt business operations. We will continue to monitor the situation and will provide further updates as they become available.” noted Compass mining.
Today an application has been published regarding one of our hosting providers. Based on the information currently available, we understand that this submission will not affect 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 Texas context, rising energy costs and multiple power outages during intense heatwaves have not helped either.
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Bloomberg Business reporter David Pan emphasized on Twitter that Compute North may have been hit by a costly delay at a major Texas mining facility that was unable to monetize for months.
“Compute North’s massive 280 MW mining facility in TX was set to run rigs 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 experienced multiple downward cycles, drying up fundraising opportunities and scaling back major backers,” he wrote.
Compute North adds to a long list of crypto firms that have either fallen victim to crypto winter – or in some cases helped create it – including Voyager Digital, Three Arrows Capital, Celsius Network, and BlockFi to name a few. to name.