Bankruptcy Concerns Loom on Crypto Mining Industry

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One of the biggest miners in the market, Core Scientific (CORZ), intends to declare bankruptcy in Texas while continuing to mine bitcoin (BTC). In September, Compute North, which runs the data centers where many miners are located filed for bankruptcy. One of Compute North’s financiers, Generate Capital, said the company declared a number of “technical events of default” in July as cryptocurrency values fell due to the collapse of Three Arrows Capital. According to Marathon Digital, the $50 million that Core Scientific’s competitor Marathon Digital deposited with Compute North for services is only expected to be partially recovered. The shares of Core Scientific are down 98% over the year, and their competitor Riot blockchain and Marathon Digital Holdings (MARA) are down 83% and 88% respectively. Investment bank B Riley put out a $72 million financing scheme earlier in December which would allow Core Scientific to avoid bankruptcy. In order to help struggling miners, Binance Pool launched a $500 million fund in October, with loans secured by both the companies’ physical assets and the cryptocurrency they were mining. Additionally, Bitmain has started a $250 million fund with a similar goal.

A non-binding agreement is signed between troubled bitcoin miner Greenidge Generation and lender NYDIG for selling most of the mining equipment. After that, the miner would sign a hosting contract with the company, thus changing its business model from a self-miner to a hosting provider. Due to financial difficulties, Greenidge is attempting to raise more money and also considering declaring bankruptcy. According to the Greenidge NYDIG agreement, Greenidge would lose 2.8 EH/s worth of mining equipment, leaving it with only 1.2 EH for self-mining. The corporation spent $8 million in the last two months, of which $5 million went toward interest and principal and interest payments. Iris Energy is removing hardware that served as collateral for loans of $71.2 million and $71 million that it took out from NYDIG in March.

Kunji crypto market update one of the most significant instances/services on the social media platform Mastodon, has been purchased by Social Coop Limited, a company connected to Mask Network. This protocol enables users to transmit encrypted messages and bitcoin transactions across social media. Elon Musk controversially banned users from spreading the word about Mastodon in October. According to Crunchbase, Mast Network claimed the acquisition will contribute to the creation of a “decentralized social network and a free, open internet,” which had raised nearly $50 million from investors since its debut in 2017.

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