Bitcoin (BTC) mining data center operator Compute North filed for Chapter 11 bankruptcy, adding that CEO Dave Perrill stepped down in early September.
The company reportedly owes $ 500 million to approximately 200 creditors and has assets worth between $ 100 and $ 500 million.
Compute North filed for bankruptcy on September 22 and will continue to operate as it seeks solutions to its liquidity problem. Meanwhile, CEO Dave Perrill will remain on the board while chief operating officer Drake Harvey will take over as CEO.
Compute North is one of the largest data center operators for cryptocurrency miners and has partnerships with leading miners such as Marathon Digital and Compass Mining. It raised $ 385 million in February: $ 300 million came from debt financing, while $ 85 million came from its Series C equity financing.
North Compute faced a declining source of revenue
The company saw its fortune reservoir after a massive market downturn that plunged Bitcoin’s value below $ 20,000. Additionally, rising energy costs and growing BTC mining difficulty have made it difficult for miners to remain profitable.
David Pan, Bloomberg reporter tweeted that one of the reasons Compute North filed for bankruptcy was the delay with which its 280mW mining facility in Texas became operational, mainly due to approval issues.
Although Compute North’s failure shows systemic unease in Bitcoin’s mining industry, this is also the result of a mix of idiosyncratic risks. 1) Hosting companies that build data centers to run plants for miners must find a very delicate balance between
– David Pan (@ DavidPan_1) September 23, 2022
According to Pan:
“[North Compute]The company’s failure indicates a growing difficulty in Bitcoin mining.
Compute North partners unaffected
Compute North partners have revealed that the company’s failure would not affect their operations.
Bitcoin mining companies – Marathon Digital and Compass Digital – tweeted that the failure of the data center operator would not impact their mining operations.
A filing regarding one of our hosting providers has been posted today. Based on the information available at this time, we understand that this deposit will not affect our current mining operations.
– Marathon Digital Holdings (NASDAQ: MARA) (@MarathonDH) September 22, 2022
Compute North staff informed us today that filing for bankruptcy should not disrupt company operations. We are continuing to monitor the situation and will provide further updates as they become available.
– Mining Compass 🧭 (@compass_mining) September 22, 2022
Compute North is the first cryptocurrency mining company to declare bankruptcy. Meanwhile, several cryptocurrency lenders such as Celsius Network, Voyager Digital, and others had previously filed for bankruptcy.