Bitcoin mining company Compute North files for bankruptcy
Compute North, a leading cryptocurrency mining data center operator that counts several top Bitcoin (BTC) mining companies as partners, has filed for bankruptcy.
The Minnesota-based company, which reportedly owes $500 to creditors, filed for Chapter 11 bankruptcy in the US Bankruptcy Court for the Southern District of Texas. The voluntary application was submitted on Thursday 22 September 2022.
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Compute North files for bankruptcy
The bankruptcy filing for one of the largest data center operators in the crypto sector comes as the broader cryptocurrency market continues to grapple with a crypto winter that has seen poor prices for digital assets.
Amidst the market downturn, cryptominers who were previously BTC hodlers have been selling to meet their daily cash obligations. For these companies, falling crypto prices combined with escalating power costs and the effects of operational delays have been bad for business.
Marathon Digital (MARA), one of the leading Bitcoin miners with a hosting agreement with Compute North, said it is monitoring the situation. But it is believed the archiving will not affect current activities.
“Today, a file related to one of our hosting providers was published. Based on the information available at this time, it is our understanding that this filing will not affect our current mining operations.”
Compass Mining, which provides hosting and brokerage services, also tweeted that its legal team was reviewing the bankruptcy filing. But just like Marathon, Compass is of the understanding that the petition will not affect mining operations.
Costly delays at Compute North’s Texas facility?
Compute North launched its business in 2017, starting as a crypto mining company before reshaping its business to offer colocation and brokerage services – specifically providing low-cost power access for data centers.
In April of this year, the company opened a massive co-location mining facility in Texas. But the operations were delayed due to regulatory hurdles.
David Pan, a Bloomberg Business reporter, says this phase of the company’s growth may have been the first step toward filing for bankruptcy. He tweeted:
“Compute North’s massive 280mw mining facility in TX was due to run rigs in April but could not due to pending approvals. From then until later this year, when it was finally able to power the machines, Bitcoin prices had gone through several downward cycles, fundraising opportunities dried up and major lenders scaled back.”
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