Bitcoin Mining Firm Core Scientific to File Chapter 11 Bankruptcy

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Companies from different sub-sectors of the crypto space have collapsed this year. From blockchain development companies to crypto lenders and major exchanges, a slew of prominent names couldn’t pass the slippery slope test of 2022.

Now, according to reports, Top Bitcoin mining company Core Scientific is on a downhill journey. The major US-based publicly traded company is reportedly filing for Chapter 11 bankruptcy protection in Texas. A person familiar with the company’s finances confirmed the same to CNBC.

Core Scientific will continue mining and not liquidate

B. Riley Financial, one of Core Scientific’s major creditors, wrote an open letter to the company’s shareholders and lenders last week. At that time, the financial services platform noted that bankruptcy was unnecessary and presented a $72 million financial plan. With this, B. Riley hoped to prevent Core Scientific from filing for Chapter 11 bankruptcy.

Moreover, due to the stagnant Bitcoin price, the health of the company has further deteriorated. In September, the US-based mining company reduced its holdings by 1,576 BTC amid mounting selling pressure.

Read More – Bitcoin: Biggest Mining Firm Sells 1,576 BTC as Selling Pressure Rises

Nonetheless, the CNBC report pointed out that the company is still generating positive cash flow. However, this cash is not sufficient to repay the financing debt owed on the equipment it leases. CNBC further noted,

“The company will not be liquidated, but will continue to operate as normal while reaching an agreement with the senior security noteholders, who hold the bulk of the company’s debt, according to this person, who declined to be named. to discuss confidential company matters.”

The company’s stock has lost most of its value this year. From over $10 at the start of the year to $0.21, CORZ noted a 98.02% discount.

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