US leading Bitcoin miner files for Chapter 11 bankruptcy. Details here

So far the current year has been havoc for the cryptocurrency market due to extreme volatility, rising interest rates, and economic uncertainties. Such led to a series of shocks for crypto markets such as the collapse of Terra tokens, liquidation of Three Arrows Capital, and illiquidity crunch which led to the bankruptcy of exchanges such as Celsius Network, FTX, and Voyager Digital among others.

As per a Reuters report, Austin, Texas-based Core Scientific said it would not liquidate and would continue to operate normally, as it expects to enter into a restructuring support agreement with its creditors, who represent over 50% of the holders of its convertible notes.

In the pre-market trading, Core Scientific (CORZ) shares dipped by 19%. Currently, CORZ is up by 3%. However, so far in 2022, it has nosedived by around 98%.

Also, Core Scientific revealed that its creditors have agreed to pump in $56 million in debtor-in-possession financing. Last week, among the largest creditors of the miner, B. Riley Financial had offered to infuse $72 million to avoid Core Scientific’s bankruptcy.

Under the bankruptcy paper, the miner said they have around $1 billion to $10 billion in assets and liabilities, while their creditors are between 1,000 and 5,000.

It is known that Core Scientific was impacted due to a lawsuit with Celsius Networks LLC and its affiliates.

Core Scientific had managed to debut on markets after a merger with a blank-check company that led the miner’s valuation to $$4.3 billion.

In September 2022 quarter, Core Scientific’s total revenue increased by $88.7 million or 118% to $164 million driven primarily by increases in digital asset mining revenue and hosting revenue, partially offset by a decrease in equipment sales. However, the miner’s gross profit stood at $12.7 million down by $11.8 million or 48%. Notably, the company’s self-mining bitcoin production increased by 1,769% to 3,365 bitcoins.

Core Scientific is one of the largest publicly traded blockchain data center providers and miners of digital assets in North America. Core Scientific has operated blockchain data centers in North America since 2017, using its facilities and intellectual property portfolio for co-located digital asset mining and self-mining. Core Scientific operates data centers in Georgia, Kentucky, North Carolina, North Dakota, and Texas, and expects to commence operations in Oklahoma in the second half of 2022.