Compute North, which happens to be the latest victim of the ongoing crypto crash, has filed for Chapter 11 bankruptcy in the US Bankruptcy Court for the Southern District of Texas.
The filing is pending before Bankruptcy Judge David R Jones. The company’s chief executive, Dave Perrill, also stepped down earlier this month, but will remain on the board.
Calculate the north in problems
According to the terms of the filing, the firm will be able to continue with its activity while it draws up a comprehensive restructuring plan to pay off creditors. Compute North disclosed that it owed up to $500 million to at least 200 creditors. Its assets, on the other hand, are worth between 100 and 500 million dollars.
The bankruptcy filing is expected to help stabilize his business as he goes through a restructuring process under court protection.
The filing comes seven months after the Minnesota-based crypto mining infrastructure provider secured a $385 million round that includes a Series C fundraising and debt financing. Most recently, a 300-megawatt co-location facility was inaugurated in Texas.
Compute North was launched in 2017 as a crypto mining operation. During the year, it expanded its operations into colocation services that provide low-cost energy for data centers. The company is also the hosting facility partner of Compass Mining, another giant in the BTC mining sector. Following the development, the latter said its legal team is reviewing the tenders and added,
“Compute North staff informed us today that the bankruptcy filing should not disrupt business operations. We continue to monitor the situation and will provide further updates as they become available.”
Struggle of mining companies
Declining cryptocurrency prices and rising US interest rates have negatively impacted the digital asset space. Earnings for mining companies have been deeply hampered amid a fairly volatile summer. Compass Mining, for example, Lost some lucrative mining rigs in Georgia this month.
The shutdown occurs after a 50% increase in energy costs. The company had cited protecting miners from recent excessive energy tariff changes by the local utility as the reason, and also revealed plans to open another facility in Texas.
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