23 Sep 2022

Bitcoin Mining Company Compute North Files For Bankruptcy

Bitcoin Mining Compa

Compute North, a bitcoin mining hosting company, has filed for chapter 11 bankruptcy. 

The company cited the move as a result of growing pressure from the impacts of crypto winter and increased energy prices. Dave Perrill, the company's CEO, has also stepped down but will continue on the board.

On September 22, the company filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of Texas. The filing is currently pending before Judge David Jones.

Under a Chapter 11 filing, the company can continue to operate while it works out a plan to repay creditors. According to the filing, Compute North owes around $500 million to 200 creditors, with assets valued between $100 million and $500 million.

Compute North provides large-scale crypto mining hosting and infrastructure, as well as hardware and a Bitcoin mining pool. It is one of the leading data center providers in the United States, with well-known BTC mining partners such as Compass Mining and Marathon Digital.

Both companies have made comments via Twitter, stating that based on the facts available at this time, their business activities would continue as usual.

The bearish performance of BTC in 2022 has had a huge influence on the mining sector this year. In this context, rising energy bills and repeated power outages during strong heat waves haven't helped either.

On Twitter, a Bloomberg Business reporter highlighted that Compute North may have been harmed by a costly delay to a large mining operation in Texas, which was not able to monetize for months.

“Compute North's enormous 280MW mining facility in Texas was intended to run rigs in April, but it was unable to do so owing to awaiting approvals. From then until later this year, when it was finally able to stimulate the machines, Bitcoin prices had gone through many downward cycles, financing prospects had dried up, and large lenders had stepped down,” he wrote.

Compute North joins a long list of crypto companies that have either been victims of — or helped create — crypto winter, including Voyager Digital, Three Arrows Capital, Celsius Network, and BlockFi, to name a few.

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