Compute North, one of the largest data center providers for crypto mininghas filed for bankruptcy. It has also been announced that the CEO has resigned now that the share price has fallen cryptocurrencyweighs prices on the industry.
Major bitcoin mining provider bankrupt
Due to the increasing pressure on the company from the effects of the crypto winter and rising energy costs, it has bitcoin (BTC) mining hosting company filed for bankruptcy. The company’s CEO, Dave Perrill, has also stepped down but remains on the board of directors.
Compute North, based in Eden Prairie, Minnesota, has said it owed as much as $500 million to at least 200 creditors. The company’s assets are worth between $100 million and $500 million, according to the Chapter 11 filing.
A Chapter 11 filing allows the company to continue operations while developing a plan to repay creditors.
Compute North announced a capital increase of $385 million, consisting of an $85 million equity round and $300 million debt financing. Yet the company has plunged into bankruptcy as miners struggle to survive amid falling bitcoin prices, rising energy costs and record difficulty in mining bitcoin.
‘Next chapter’ for the BTC mining industry
The application could have negative consequences for the industry. Compute North is one of the largest suppliers of data centers for miners and has multiple agreements with other larger mining companies.
One of the company’s partners is Marathon Digital (MARA), where Compute North has brought online 40 megawatts (MW) of a 280 MW wind power plant in its Upton County, West Texas.
The company has released a statement via Twitter, noting that with the information they currently have, their business will continue as normal.
Today, a filing related to one of our hosting providers was published. Based on the information available at this time, it is our understanding that this filing will not impact our current mining operations.
— Marathon Digital Holdings (NASDAQ: MARA) (@MarathonDH) September 22, 2022
The bitcoin news has often not been good news in the past year. The bearish Bitcoin’s performance in 2022 has had a significant impact on the mining sector this year. In the case of Texas, rising energy costs and multiple power outages during intense heat waves haven’t helped either. Major mining manufacturer Bitmain has already lowered the prices of its rigs, also because of the bad conditions.