Compute North, which happens to be the latest casualty of the ongoing crypto rout, has filed for a Chapter 11 bankruptcy in the US Bankruptcy Court for the Southern District of Texas.
The filing is pending before the Judge Bankruptcy David R Jones. The company’s CEO, Dave Perrill, also stepped down from his position earlier this month but will continue to remain on the board.
Compute North in Trouble
Under the terms of the filing, the firm will be able to continue its operation while it draws up a comprehensive restructuring plan to repay creditors. Compute North revealed that it owed as much as $500 million to at least 200 creditors. Its assets, on the other hand, are worth between $100 million and $500 million.
The bankruptcy filing is expected to help stabilize its business as carries out a restructuring process under court protection.
The filing comes seven months after the Minnesota-based crypto mining infrastructure provider secured a $385 million round that includes a Series C fundraise and debt financing. More recently, it broke ground on a 300-megawatt co-location facility in Texas.
Compute North was launched in 2017 as a crypto mining operation. Over the year, it expanded its operations into co-location services offering low-cost power for data centers. The company is also the hosting facility partner of Compass Mining, another giant in the BTC mining sector. Following the development, the latter said its legal team is reviewing the bankruptcy petitions and added,
“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.”
Mining Companies Struggle
The dwindling prices of cryptocurrencies and the increasing US interest rates have adversely affected the digital asset space. The earnings of mining companies have been deeply hampered amid a rather volatile summer. Compass Mining, for one, lost a few lucrative mining facilities in Georgia this month.
The shutdown follows a 50% rise in energy costs. The firm had cited protecting miners from excessive energy rate changes recently applied by the local utility as the reason and further revealed plans to open another facility in Texas.