Core Scientific, one of the largest bitcoin mining companies, has filed for bankruptcy amid falling cryptocurrency prices and surging energy prices, becoming the latest victim of the ongoing crypto winter.
firm on wednesday filed for Chapter 11 Bankruptcy Protection in Texas. The filing notes that Core Scientific has $1 to $10 billion in assets, and also $1 to $10 billion in liabilities.
The company has attributed its bankruptcy to a $7 million unpaid loan from Celsius Network, a bankrupt cryptocurrency lending company, falling crypto prices and rising energy costs for mining, in addition to rising energy costs for mining.
In a court filing, Core Scientific said it suffered losses Net loss of $434.8 million for the three months ending September 30, 2022, and had only $4 million in liquidity at the time of the bankruptcy filing. company had revealed Bankruptcy is on the table through the end of October.
Core Scientific mines for proof-of-work cryptocurrencies like bitcoin. The process, which requires expensive equipment and lots of electricity, involves powering data centers across the country, filled with highly specialized computers that crunch math equations to validate transactions and Also create new tokens as well.
When the company acquires Core Scientific at a record valuation of $4.3 billion in mid-2021 went public Through a special purpose acquisition vehicle or SPAC. However, the company’s market capitalization had dropped to $78 million by the end of Tuesday’s trading, with its stock down more than 98% over the past year.
Apart from Core Scientific, other crypto mining firms are also struggling amid the market downturn. Argo Blockchain, Iris Energy, and Greenidge Generation are among the more notable bitcoin mining companies facing financial issues.
This year has been one of the worst on record for the crypto sector, with over a trillion dollars in value wiped off the market. Rising interest rates as well as rising concerns of an economic recession have also attributed the fall in prices.
While the crypto market crash has eliminated major industry players like crypto hedge funds Three Arrows Capital and Celsius, the biggest blow came after FTX, the third largest crypto exchange in the world, filed for bankruptcy protection last month. did.
As mentioned, the infamous founder of FTX was Sam Bankman-Fried. Arrested Earlier this month, US prosecutors in the Bahamas formally filed criminal charges against him.
The Southern District of New York indicted SBF on eight criminal charges, including conspiracy to commit wire fraud and misappropriation of customer funds. Separately, the Securities and Exchange Commission accused SBF of “conducting a scheme to defraud equity investors in FTX”.
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