HomeCrypto StartupsMajor Bitcoin Mining Company Core Scientific Files for Chapter 11 Bankruptcy Protection.

Major Bitcoin Mining Company Core Scientific Files for Chapter 11 Bankruptcy Protection.


Core Scientific, one of the largest Bitcoin mining companies in the world holding 10% of the global hashrate, has filed for Chapter 11 bankruptcy protection in the United States. Chapter 11 bankruptcy allows a company to continue its operations while it restructures and pays off its debts, which in Core Scientific’s case are estimated to be over a billion dollars.

The decision to file for bankruptcy was not surprising, as Core Scientific had already warned of its critical fragility and potential bankruptcy in an October 26 statement to the Securities and Exchange Commission (SEC). Following this announcement, the company’s stock price (CORZ) plummeted, losing 90% of its value within two weeks.

Core Scientific’s stock has been listed on the NASDAQ stock exchange since its merger with SPAC Power & Digital Infrastructure Acquisition (ticker XPDBU) in January. However, the company’s stock price has faced consistently downward pressure due to unfavorable market conditions.

According to CNBC, Core Scientific is still able to generate positive cash flow, but not enough to pay for its numerous Bitcoin mining machines. Like many miners at the time, Core Scientific had made large investments in mining equipment when Bitcoin’s price was at its all-time high in late 2017. However, the subsequent market downturn has made it difficult for the company to generate sufficient profits to pay off its debts.

The Chapter 11 bankruptcy process will give Core Scientific the opportunity to restructure and negotiate with its creditors to find a solution that allows the company to continue its operations. It remains to be seen how the bankruptcy proceedings will play out, but it is clear that the company is facing significant challenges.

This news highlights the volatility and risk involved in the Bitcoin mining industry, as well as the importance of proper financial management for companies operating in the space. It will be interesting to see how Core Scientific’s bankruptcy proceedings play out and how it will impact the wider Bitcoin mining industry.



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