Core Scientific will be the last company in the crypto industry to declare bankruptcy through Chapter 11. According to sources, the company plans to continue mining cryptocurrencies.
The cryptocurrency bear market, accelerated by the collapse of FTX, has prompted another company in the crypto industry to file for Chapter 11 bankruptcy protection.
According to CNBC, Core Scientific has initiated bankruptcy proceedings in Texas, United States, after the difficulties of mining cryptocurrencies profitably, with the price drop that crypto assets have seen this year and the increase in the price of energy, will affect the productivity and performance of your business.
Core Scientific plans to officially file for Chapter 11 bankruptcy on Wednesday, the outlet said.
The news has already caused a 98% drop in the share price of Core Scientific, which went public last year. According to data from Investing, the shares of the crypto mining company are trading on the market at $0.21 dollars per unit, currently.
However, despite the company’s probable bankruptcy filing, Core Scientific has signaled that it will continue its crypto mining operations.
A company spokesperson told CNBC that the bankruptcy process will not affect its activities, so Core Scientific will continue to mine bitcoins and other crypto assets until a restructuring agreement is reached with the main holders of shares and security notes. According to the outlet, Core Scientific’s noteholders hold most of the company’s debt, which had warned last October of a possible total loss.
Until now, Core Scientific was one of the largest cryptocurrency mining companies in the industry, with more than 325,000 ASIC devices in operation in different states, such as Texas, North Dakota, North Carolina, Georgia and Kentucky.
In July of this year, the company had signed an agreement to expand its crypto mining operations in the United States, installing additional ASIC equipment with an operating capacity of 75 megawatts (MW). Likewise, at the beginning of the year, Core Scientific reported that close to 60% of its cryptocurrency mining operations were being powered by renewable energy sources.
Like Core Scientific, other cryptocurrency miners such as Greenidge Generation are facing major difficulties due to reduced profitability. Mining hosting services company Compute North filed for bankruptcy in September after hedge fund Three Arrows Capital imploded.
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