News Tech: As the collapse in cryptocurrency prices strains on the business, Compute North, one of the biggest operators of crypto-mining data centres, filed for bankruptcy and disclosed that its CEO had resigned.
In February, Compute North announced a $385 million capital raising, made up of a $85 million Series C stock round and $300 million in debt financing. However, it failed due to miners’ struggles to subsist in the face of falling bitcoin (BTC) prices, rising power prices, and record mining challenges. The filing is anticipated to have detrimental effects on the sector. One of the biggest data centre providers for miners is Compute North, which also has other agreements with other bigger mining firms.
According to a filing, the business requested Chapter 11 bankruptcy protection from the U.S. Bankruptcy Court for the Southern District of Texas.
In an email statement, a company representative said, “The Company has voluntarily filed for Chapter 11 proceedings to give the company the opportunity to stabilise its business and implement a comprehensive restructuring process that will enable us to continue serving our customers and partners and make the necessary investments to achieve our strategic objectives.”
Marathon also tweeted that it was in contact with Compute North and that the bankruptcy proceedings won’t have an impact on its present mining operations.
Additionally, on March 7, cryptocurrency miner Hive Blockchain (HIVE) and Compute North agreed to a contract for 100MW of mining power. In after-hours trading on Thursday, Marathon’s stock price fell a little while Hive’s price stayed the same. Additional agreements were made by Compute North with Singapore’s Atlas Mining, China’s The9, BitNile Holdings (NILE), Bit Digital (BTBT), and Sphere 3D. (ANY). BitNile’s stock fell by around 1% in after-hours trade, while Bit Digital slightly increased.
Along with its parent company, Celsius Network’s mining division filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York on July 14. The division had previously announced in March that it intended to go public. After freezing withdrawals the previous week, Poolin Wallet, the wallet service of one of the biggest bitcoin (BTC) mining pools, said on September 13 that it will give IOU (I Owe You) tokens to affected users.