Bitcoin (BTC) mining host Compute North has filed for Chapter 11 bankruptcy amid mounting pressure on the company due to the effects of the crypto winter and rising energy costs. The company’s CEO, Dave Burrell, has also resigned, but he will remain on the board.
The company filed for Chapter 11 bankruptcy in the US Bankruptcy Court for the South Texas District on Thursday, and it is now pending before Judge David Jones.
Under Chapter 11, the company is still able to continue its operations as it works on a plan to repay creditors. The filing reportedly shows that Compute North owes about $500 million to 200 creditors, while its assets are said to range between $100 million and $500 million.
Compute North offers services and facilities to host large scale mining, BTC mining hardware and pool. It is one of the largest data center providers in the United States and has well-known partners in the BTC mining sector, such as Compass Mining and Marathon Digital.
The two companies came out with statements via Twitter, noting that with the information they have at this point, their business operations will continue as normal.
“Compute North employees informed us today that the bankruptcy filing should not disrupt business operations. We are continuing to monitor the situation and will provide further updates as they become available,” Compass Mining noted.
Bitcoin’s bearish performance in 2022 has had a huge impact on the mining sector this year, and in the context of Texas, rising energy costs and power outages during intense heat waves haven’t helped either.
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Bloomberg Business reporter David Pan highlighted on Twitter that Compute North may have been affected by the costly delay of a large mining facility in Texas that it has been unable to monetize for months.
“The massive 280MW Compute North mining facility in Texas was supposed to start up the rigs in April, but that didn’t happen due to pending approvals. From then until later this year, when it finally got the machines going, Bitcoin prices have gone through multiple bearish cycles, fundraising opportunities have dried up and major lenders have declined.
Compute North adds to a long list of crypto companies that have fallen victim to or, in some cases, helped create the crypto winter — including Voyager Digital, Three Arrows Capital, Celsius Network, and BlockFi, to name a few.