A leading cryptocurrency mining company filed for Chapter 11 bankruptcy Wednesday, but plans to keep operating as usual. File Photo by Carlos Amarillo/Shutterstock
Dec. 21 (UPI) — A leading cryptocurrency mining company filed for Chapter 11 bankruptcy Wednesday, but plans to keep operating as usual.
Core Scientific, one of the largest miners of the cryptocurrency bitcoin, filed for bankruptcy in its home state of Texas, seeking protection after incurring massive losses in 2022. The Austin, Texas-based company has locations in Georgia, Kentucky, North Carolina and North Dakota.
The company’s value has dropped from about $4.3 billion in July 2021, to about $78 million at the close of market on Wednesday. The crash represents a 98% loss in value.
Core Scientific became publicly traded in July 2021.
In a notice of its bankruptcy filing, Core Scientific said this path was “necessitated by a decline in the company’s operating performance and liquidity suffering from the prolonged decrease in the price of bitcoin, the increase in electricity costs necessary to power the company’s data centers, and the failure by certain of its hosting customers to honor their payment obligations.”
In November, when Core Scientific last announced an update on its operations, it reported selling about $44.8 million in bitcoin while holding about $32 million in cash in October.
The company also said it “powered down” several of its operations, including one in Texas, “several times.”
“Core Scientific works with the communities and utility companies in which it operates to enhance electrical grid stability,” the company said.
With about 100,000 customers and up to 1,500 creditors, Core Scientific is not planning to shut down or liquidate its assets. Yahoo! Finance reports it has between $1 and $10 billion in assets and liabilities. The restructuring agreement will allow Core Scientific to “continue to operate normally,” it said.
