Compute North, a leading data center operator for cryptocurrency mining and partnering with several major Bitcoin (BTC) mining companies, has filed for bankruptcy.
The Minnesota-based company, which reportedly owes $ 500 to creditors, filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of Texas. The voluntary filing was presented on Thursday 22 September 2022.
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Calculate the North bankruptcy file
Filing for bankruptcy for one of the largest data center operators in the cryptocurrency industry comes as the broader cryptocurrency market continues to struggle with a crypto winter that has caused digital asset prices to plummet.
In the midst of the market downturn, cryptocurrency companies that have been the main lessors of BTC in the past have sold to meet their daily cash obligations. For these companies, falling cryptocurrency prices, combined with rising energy costs and the impact of operational delays, have been detrimental to businesses.
Marathon Digital (MARA), a leading Bitcoin mining company with a hosting agreement with Compute North, said it is monitoring the situation. However, it is believed archiving will not affect ongoing activities.
“A filing regarding one of our hosting providers was posted today. Based on the information available at this time, we understand that this deposit will not affect our current mining operations. “
Compass Mining, which provides hosting and brokerage services, also tweeted that its legal team was looking into filing for bankruptcy. But just like Marathon, Compass is aware that the petition will have no impact on its mining operations.
Costly delays at Compute North Texas facility?
Compute North launched its operations in 2017, starting as a cryptocurrency mining company before relaunching its business to offer co-location and brokerage services, specifically providing low-cost access to power for data centers.
In April of this year, the company opened a huge co-located mining facility in Texas. But its operations were delayed due to regulatory hurdles.
David Pan, a Bloomberg Business reporter, says this phase of the company’s growth may have been the first step towards filing for bankruptcy. He tweeted:
“Compute North’s massive 280mW mining facility in Texas was supposed to get rigs up and running in April, but it was not possible due to pending approvals. Since then to the end of this year, when he was finally able to power the machines, Bitcoin prices have gone through multiple downward cycles, fundraising opportunities have run out and major lenders have fallen. “
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