On December 21, major publicly traded cryptocurrency miner Core Scientific will file for Chapter 11 bankruptcy protection in Texas. This is due to deteriorating financial conditions brought on by decreasing cryptocurrency prices and rising energy prices.
The crypto miner was unable to operate effectively even after receiving $72 million in financing from its lender B. Riley last week to avert bankruptcy, according to CNBC. The company will work on restructuring. Core Scientific intends to continue mining until its balance sheet is restructured.
A individual with knowledge of the company’s circumstances claims that the company is still producing a positive cash flow. Cash, however, is not enough to pay back the financial debt on the mining equipment it was leasing. Until an agreement is reached with the senior security noteholders, who are in control of the majority of the company’s debt, Core Scientific will not liquidate and continue to run normally.
Bitcoin miners have come under a lot of pressure as a result of the decline in profitability they experienced due to falling cryptocurrency prices and rising energy costs. Other significant cryptocurrency lenders, such Celsius Network and Voyager Digital Ltd., have also filed for bankruptcy as a result of the harsh market conditions.
