Core Scientific is reportedly filing for Chapter 11 bankruptcy in Texas due to falling BTC revenues and prices.
Just days after a creditor offered to help Core Scientific avoid potential bankruptcy, reports surfaced confirming Bitcoin
fate of the mining company. Basic science files for Chapter 11 bankruptcy protection in Texas due to falling revenues and low BTC prices.
On Dec. 14, financial services platform B. Riley offered to provide Core Scientific with $72 million in-kind funding — $40 million without contingencies and $32 million with conditions — to determine value for stakeholders. The move came after Core’s valuation fell from $4.3 billion in July 2021 to $78 million at the time of the report’s release.
As a direct result of a prolonged bear market, Core Scientific had to sell 9,618 BTC in April to stay operational. A CNBC report quoted a person familiar with the company’s finances as saying the bitcoin mining company would file for Chapter 11 bankruptcy in early December 21. Cointelegraph confirmed this after reviewing the official application document.
While the company continues to generate positive cash flow, revenue is insufficient to cover operating expenses, which include rent reimbursement for its bitcoin mining equipment.
The report also indicates that Core Scientific will continue its mining operations and has no intention of liquidating. When B. Riley offered his hand, the company’s shares briefly soared nearly 200%, but have since fallen steadily.
Core Scientific stock price movement on the Nasdaq. Source: Trading View
On October 26, a Core Scientific filing with the United States Securities and Exchange Commission indicated financial difficulties. According to the company, the main reasons for this were low bitcoin prices, rising electricity costs, an increase in bitcoin’s global hash rate, and the bankruptcy of crypto lender Celsius, which wrote off debt. to Core Scientific.
Core Scientific has not yet responded to Cointelegraph’s request for comment.
Related: Bitcoin Miner Greenidge Signs $74M Debt Restructuring Deal With NYDIG
Tech giant Microsoft recently blocked its cloud users from mining cryptocurrencies to increase the stability of its cloud services.
As Cointelegraph reported, on December 1, Microsoft updated its Acceptable Use Policy to state that “cryptocurrency mining without Microsoft’s prior approval is prohibited.”
The company said its intention was to protect customers by reducing the risk of disruptions or compromised services in the Microsoft cloud.