Core Scientific, a cryptocurrency company, filed for Chapter 11 bankruptcy protection in Texas on Wednesday, Dec. Core Scientific, one of the largest publicly traded crypto mining companies in the US, has decided to file for bankruptcy amid worsening crypto prices and rising energy prices. Here are the details…
Another cryptocurrency miner is closing the shutters
Despite the $72 million in financing they received last week to avoid bankruptcy from lender B. Riley, the crypto miner was unable to operate efficiently, CNBC reported. Core Scientific plans to continue mining until it restructures its balance sheet. Core Scientific’s market cap fell to $78 million on Tuesday, from $4.3 billion when it went public in July 2021. CORZ stock price has dropped more than 98% last year. The stock price was up 3.07% on Tuesday to close at $0.21.
According to a person familiar with the company’s situation, the company still provides positive cash flow. But the cash is insufficient to pay off his debt on the mining equipment he rents. Core Scientific will not liquidate and operate normally until it reaches an agreement with the senior bondholders who hold most of the company’s debt.
cryptocoin.com As we reported, many crypto miners are facing financial constraints amid the bear market. Crypto researcher Dylan Leclair reports that the firm has around 5 percent of the global hash rate. A few crypto miners like Argo Blockchain and Iris Energy, Compute North are at risk of bankruptcy. Therefore, many people have expressed their concerns about the future of bitcoin mining.
Market conditions adversely affected the company
Core Scientific had already hinted a month ago that its operations were short of cash due to market conditions. Core Scientific was investigating some PoW assets like Bitcoin. As we know, this requires high-tech machinery and equipment. It also consumes a huge amount of electricity in the process. In July 2021 last year, the Bitcoin miner made a public listing through the SPAC.
Sources also stated that Core Scientific is not willing to liquidate. He added, however, that the company will continue to operate as normal as it reaches an agreement with top securities bond holders who hold the majority of its debt. Core Scientific pointed to common stock holders in its filing in early October. He said they could suffer a complete loss of their investment. Core Scientific currently operates in North Dakota, North Carolina, Georgia, and Kentucky. It is also one of the largest Blockchain infrastructure and “host” providers.
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