Bitcoin (BTC) mining data center operator Compute North filed for Chapter 11 Bankruptcy, adding that CEO Dave Perrill resigned earlier in September.
The firm reportedly owes $500 million to about 200 creditors and has assets valued between $100 and $500 million.
Compute North filed for bankruptcy on Sept. 22 and will continue operations as it seeks to find solutions to its liquidity problem. Meanwhile, CEO Dave Perrill will remain on the board while chief operating officer Drake Harvey will take over as President.
Compute North is one of the biggest data center operators for crypto miners and has partnerships with major miners like Marathon Digital and Compass Mining. It raised $385 million in February — $300 million came from debt financing, while $85 million came from its Series C equity financing.
Compute North faced a declining revenue source
The company saw its fortune tank after a massive market downturn that plunged Bitcoin’s value below $20,000. Additionally, rising energy costs and increasing BTC mining difficulty have made it difficult for miners to stay profitable.
Bloomberg Business Reporter David Pan tweeted that one reason Compute North filed for bankruptcy was the delay in its 280mw mining facility in Texas becoming operational — mainly due to approval issues.
According to Pan:
“[Compute North]’s bankruptcy indicates increasing distress in Bitcoin mining.”
Compute North partners unaffected
Compute North partners have revealed that the firm’s bankruptcy would not affect their operations.
Bitcoin mining firms — Marathon Digital and Compass Digital — tweeted that the data center operator’s bankruptcy would not impact their mining operations.
Compute North is the first crypto mining-related company to file for bankruptcy. Meanwhile, several crypto lenders like Celsius Network, Voyager Digital, and others had earlier filed for bankruptcy.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.