Bitcoin mining firm Compute North filed for Chapter 11 bankruptcy protection in Texas on Thursday as the crypto winter continues to put pressure on crypto mining operations. The bankruptcy petition filed on September 22, indicates the company looks to stabilize operations in order to repay creditors.
Count Answer Files for Chapter 11 Bankruptcy Protection
Five months ago last April, Compute North revealed that the company was building a 300 megawatt (MW) data center in Texas. A few months before that in late 2021, Compute North struck a deal with Marathon Digital Holdings (Nasdaq: MARA) and the two firms agreed to host more than 100,000 application-specific integrated circuit (ASIC) miners in data centers across the country. planned.
Recent Chapter 11 bankruptcy protection filings now show Compute North is dealing with financial issues. Speaking with Steven Church and David Pan from Bloomberg, Kristyan Mjolsnes, head of Compute North’s marketing and sustainability team explained that the firm looks to stabilize operations.
Compute North “seees the opportunity to stabilize its business and implement a comprehensive restructuring process,” Mjolsnes said. ,[It] This will enable us to continue to serve our customers and partners and make the investments necessary to achieve our strategic objectives, the company executive explained.
The bankruptcy filing follows the company raising roughly $410 million in equity and debt funding this year. Furthermore, Compute North has had to deal with falling bitcoin (BTC) prices and at the end of June it was said that $4 billion in bitcoin mining loans were in distress. Falling bitcoin and crypto asset prices have triggered a number of bankruptcies stemming from digital currency lenders and cryptocurrency-backed hedge funds.
MARA Stock Downgraded Over Compute North’s Recent Bankruptcy Filing, Marathon Says Compute North’s Reorganization ‘Will Not Affect Current Mining Operations’
Compute North’s bankruptcy has hit Marathon Digital’s stock after BTIG analyst Gregory Lewis decided to downgrade the equity. Lewis said Compute North’s recent filing “will weigh on MARA’s ability to increase its hash power. However, in the long run, Compute North’s bankruptcy provides an opportunity for MARA to build up a data center infrastructure footprint at distressing pricing.” Marathon Digital also took to Twitter to discuss the recent bankruptcy filing.
“Today, a filing related to one of our hosting providers was published,” Marathon Digital tweeted. “Based on the information available at this time, it is our understanding that this filing will not impact our current mining operations. We are in communication with the hosting provider and monitoring their progress as they work through this process,” the bitcoin mining firm added.
