BTC mining firm Compute North files for bankruptcy

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Bit­coin (BTC) min­ing host­ing firm Com­pute North has filed for chap­ter 11 bank­rupt­cy, amid grow­ing pres­sure on the firm due to the effects of cryp­to win­ter and ris­ing ener­gy costs. The firm’s CEO Dave Per­rill has also stepped down but will remain on the board. 

The com­pa­ny sub­mit­ted a Chap­ter 11 bank­rupt­cy fil­ing in the U.S. Bank­rupt­cy Court for the South­ern Dis­trict of Texas on Sept. 22, which is now pend­ing before Judge David Jones. 

Under a Chap­ter 11 fil­ing, the firm is still able to keep its oper­a­tions going as it works out a plan to repay cred­i­tors. The fil­ing report­ed­ly out­lines that Com­pute North owes around $500 mil­lion to 200 cred­i­tors, while its assets are said to be worth between $100 mil­lion and $500 million. 

Com­pute North offers large scale cryp­to min­ing host­ing ser­vices and facil­i­ties, hard­ware and a BTC min­ing pool. It is one of the largest data cen­ter providers in the U.S. has big name part­ners in the BTC min­ing sec­tor such as Com­pass Min­ing and Marathon Digital. 

Both com­pa­nies have come out with state­ments via Twit­ter, not­ing that with the infor­ma­tion they have at this stage, their busi­ness oper­a­tions will con­tin­ue as normal. 

“Com­pute North’s staff 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,” not­ed Com­pass Mining. 

The bear­ish per­for­mance of BTC in 2022 has had a sig­nif­i­cant impact on the min­ing sec­tor this year, and in the con­text of Texas, ris­ing ener­gy costs and mul­ti­ple pow­er out­ages dur­ing intense heat waves haven’t helped either.

Relat­ed: Maple Finance launch­es $300M lend­ing pool for Bit­coin min­ing firms

Bloomberg Busi­ness reporter David Pan high­light­ed on Twit­ter that Com­pute North may have been impact­ed by a cost­ly delay to a large min­ing facil­i­ty in Texas that it wasn’t able to mon­e­tize for months. 

“Com­pute North’s mas­sive 280MW min­ing facil­i­ty in TX was sup­posed to run rigs in April but it couldn’t due to pend­ing approvals. From then to lat­er this year when it final­ly was able to ener­gize the machines, Bit­coin prices had gone through mul­ti­ple down­ward cycles, fundrais­ing oppor­tu­ni­ties dried up and major lenders scaled back,” he wrote. 

Com­pute North adds to a long list of cryp­to firms that have either fall­en vic­tim to cryp­to win­ter — or in some cas­es helped cre­ate it — includ­ing Voy­ager Dig­i­tal, Three Arrows Cap­i­tal, Cel­sius Net­work and Block­Fi to name a few. 

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