One of the Largest Bitcoin Mining Firms Just Filed For Bankruptcy – Here’s What it Means for the Crypto Industry
Core Scientific, one of the largest Bitcoin mining companies, has filed for bankruptcy amid plunging cryptocurrency prices and skyrocketing energy prices, becoming the latest victim of the ongoing crypto winter.
On Wednesday, the firm filed for Chapter 11 bankruptcy protection in Texas. The filing notes that Core Scientific has $1 to $10 billion in assets, and also $1 to $10 billion in liabilities.
The company has attributed its bankruptcy to a $7 million unpaid debt from Celsius Network, a bankrupt cryptocurrency lending company, besides slumping crypto prices and rising energy costs for mining.
In the court filings, Core Scientific said that it had suffered a net loss of $434.8 million for the three months ending September 30, 2022, and had just $4 million in liquidity at the time of its bankruptcy filing. The company had revealed that bankruptcy is on the table by the end of October.
Core Scientific mines for proof-of-work cryptocurrencies like Bitcoin. The process, which requires expensive equipment and a lot of electricity, involves powering data centers across the country, packed with highly specialized computers that crunch math equations in order to validate transactions and simultaneously create new tokens.
Core Scientific gained a record valuation of $4.3 billion in mid-2021 when the company went public through a special purpose acquisition vehicle or SPAC. However, the company's market capitalization had fallen to $78 million as of the end of trading Tuesday, with its stock down by over 98% over the past year.
Aside from Core Scientific, other crypto mining firms are also struggling amid the market downturn. Argo Blockchain, Iris Energy, and Greenidge Generation are among the more notable Bitcoin mining
Read more on cryptonews.com
