JAKARTA - Bitcoin (BTC) mining hosting company Compute North has filed for bankruptcy in the midst of increasing pressure on the company due to the crypto winter effect and rising energy costs. Compute North CEO Dave Perrill has also resigned but will remain on board of directors.
The company filed for bankruptcy for Chapter 11 at the United States Bankruptcy Court for the Southern District of Texas on Thursday, which is now pending before Judge David Jones.
Under the Chapter 11 filing, the company can still maintain its operations when preparing plans to pay creditors. The filing reportedly outlines that Compute North owes about $500 million to 200 creditors, while its assets are said to be worth between 100 million and 500 million US dollars.
Compute North offers large-scale crypto mining hosting services and facilities, hardware, and a pool of BTC mining. This is one of the largest data center providers in the US and has well-known partners in the BTC mining sector, such as Compass Mining and Marathon Digital.
The two companies have issued a statement via Twitter, noting that with the information they have at this stage, their business operations will continue as usual.
Staff Compute North informed us today that bankruptcy filing should not interfere with business operations. We are continuing to monitor the situation and will provide further updates as it becomes available," Compass Mining said as quoted by Cointelegraph.
BTC's bearish performance in 2022 had a significant impact on this year's mining sector, and in Texas context, rising energy costs and multiplier power outages during heavy heat waves also did not help.
Bloomberg Business reporter David Pan highlighted on Twitter that Compute North may have been affected by an expensive delay to major Texas mining facilities that could not be monetized for months.
The large mining facility of 280MW Compute North at TX was supposed to run rigs in April but could not due to delayed approval. From then on until the end of this year when it was finally able to energize the engine, the price of Bitcoin has gone through several cycles of decline, opportunities for fundraising to dry up and the main lender to be reduced, he wrote.
Compute North adds to the long list of crypto companies that have been victims of crypto winter or, in some cases, helping through, including Voyager Digital, Three Arrows Capital, Celsius Network and BlockFi, for several names.
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