Bitcoin mining company Iris Energy may fail to pay off its loans
Several unfortunate cases are emerging in the Bitcoin and crypto ecosystem. The main reason for these adverse events comes down to the current bearish trend in the cryptocurrency market. Regardless of experts’ optimistic predictions, investors remain skeptical about future investments.
Some crypto firms are seeking ways to maintain their employees and clients. Others are making sure they don’t run out of funds before the end of 2022. An example of such companies is Bitcoin miner Iris Energy.
Iris Energy is a Bitcoin mining company based on the data center infrastructure. It aims to operate by accessing underutilized or abundant renewable energy.
The main goal is to support local communities and the wider Bitcoin network and decarbonize energy markets.
Iris Energy is facing crisis due to crypto crash
On Tuesday, Iris Energy disclosed its transactions with NYDIG regarding the arrangement of funds. NYDIG is a Bitcoin brokerage responsible for raising funds for ASICs – Bitcoin mining machines.
The Bitcoin mining company mentioned some problems with some of the mining vehicles. It stated that some SPVs – Special Purpose Vehicles are not performing up to standard in terms of cash flow. So it is quite challenging to meet the debt of the lender.
Iris stated that there is still an outstanding principal debt of $104 million to be paid by the three Non-Resource SPVs financed by the company. In addition, the non-resource SPVs are expected to pay interest of $7 million monthly. This figure seems relatively high considering the $2 million profit they make in the same period.
Also, SPV’s miners are to receive between $65 million and $70 million, which is much lower than the cost. The situation is not favorable for the BTC mining company. So it stated that the second and third SVP are not making the main payments scheduled for November 8. This decision may lead to further crisis, but the company is willing to deal with it.
Iris Energy is facing crisis due to crypto crash
On Tuesday, Iris Energy disclosed its transactions with NYDIG regarding the arrangement of funds. NYDIG is a BTC brokerage institution responsible for raising funds for ASICs – Bitcoin mining machines.
The BTC mining company mentioned some problems with some of the mining vehicles. It stated that some SPVs – Special Purpose Vehicles are not performing up to standard in terms of cash flow. So it is quite difficult to meet the debt to the lender.
Iris stated that there is still an outstanding principal debt of $104 million to be paid by the three Non-Resource SPVs financed by the company. In addition, the non-resource SPVs are expected to pay interest of $7 million monthly. This figure seems relatively high considering the $2 million profit they make in the same period.
Also, SPV’s miners are to receive between $65 million and $70 million, which is much lower than the cost. The situation is not favorable for the BTC mining company. So it stated that the second and third SVP are not making the main payments scheduled for November 8. This decision may lead to further crisis, but the company is willing to deal with it.
There is a tendency for the company’s cumulative hash power of 3.6 EH/s to go offline. But this will only happen if the event comes down to standard. This hash power is equal to the total hash rate of the BTC network, which is about 1.5%.
Meanwhile, Iris Energy is not the only crypto firm facing the challenge of paying off debt through bankruptcy. In October, Core Scientific shared a post that indicated the possibility of default due to the inability to service certain debts.
According to the company, there were only about 24 BTC left in the reserve and $26 million in cash. The drop is significant considering that as of June it held up to 7,000 BTC.
featured Image from Pixabay, Charts by TradingView
