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Bitcoin mining company Core Scientific applies for bankruptcy protection! Cash shortage to pay off equipment debts

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Bitcoin mining company Core Scientific applies for bankruptcy protection! Cash shortage to pay off equipment debts

Due to factors such as the continued sluggishness of Bitcoin prices, rising energy costs, and increasing mining difficulty, many cryptocurrency mining companies are facing operational crises. Core Scientific, one of the largest publicly traded cryptocurrency mining companies in the United States, has reportedly filed for bankruptcy protection, but the company will continue to operate and will not undergo liquidation.

Core Scientific, a Listed Mining Company, Files for Bankruptcy Protection

According to CNBC, Core Scientific filed for Chapter 11 bankruptcy protection in Texas last Wednesday. Core Scientific went public on the Nasdaq via a SPAC deal in July last year, and its stock price has plummeted over 98% since then.

Sources familiar with the matter stated that Core Scientific is still generating positive cash flow, but the cash on hand is insufficient to repay the financing debts owed for leased equipment, and debts due at the end of October and early November have not been repaid. However, the company will not liquidate and has reached an agreement with a significant group of debt holders to continue its operations.

As previously reported, Core Scientific disclosed on 10/27 that its cash would be depleted by the end of this year or sooner and might seek bankruptcy, which has now materialized. Core Scientific has been impacted by factors such as a significant reduction in mining revenue, rising energy prices, and industry competition. It is also linked to the bankruptcy platform Celsius, which owes it $5.4 million.

Additionally, another cryptocurrency mining company, Compute North, also filed for bankruptcy protection at the end of September this year.

Bitmain's New Mining Machines Sold Out in Seconds

Despite the challenges in the bear market for the mining industry, Bitmain, specializing in manufacturing Bitcoin mining machines, announced on Twitter today that their latest mining machine "ANTMINER #HS3" sold out in just 27 seconds. This indicates that there is still demand in the market even when mining machine prices are dropping in the bear market.