Bitcoin (BTC) mining hosting firm Compute North has filed for Chapter 11 bankruptcy, during growing pressure of the firm amidst the effects of cryptocurrency winter and increasing energy costs. David Perrill, CEO, Compute North, resigned from his position but is expected to remain with the company’s board, as reported by Cointelegraph.
According to Cointelegarph, under a Chapter 11 filing, the firm will be able to conduct its operations, and will continue to draft a plan for repaying creditors. Reportedly, the firm stated that Compute North owes close to $500 million to 200 creditors, while its assets are said to be worth between $100 million and $500 million. Compute North claims to provide large scale cryptocurrency mining hosting services and facilities, hardware and a BTC mining pool. It is considered to be one of the largest data centre providers in US, and has partners in the BTC mining industry such as Compass Mining and Marathon Digital.
“Compute North’s staff informed us that the bankruptcy filing should not disrupt business operations. We are continuing to monitor the situation and will provide further updates as they become available,” Compass Mining stated.
On the basis of information by Cointelegraph, bearish performance of BTC in 2022 has had an impact on the mining sector for 2022, and in the context of Texas, increase in energy costs and power outages at the time of heat waves haven’t contributed to the cause either. Bloomberg business reported David Pan emphasised on Twitter that Compute North may have faced implications on account of a cost-based delay to a Texas mining facility which it wasn’t able to monetise for a period of time.
“Compute North’s 280MW mining facility in TX was supposed to run rigs in April but it couldn’t due to pending approvals. From then to later this year when it finally was able to energise the machines, Bitcoin prices had gone through multiple downward cycles, fundraising opportunities dried up and lenders scaled back,” Pan mentioned.
(With insights from Cointelegraph)