Technology

Big bitcoin miners about to go bankrupt: investors fear for their money

By on Friday, December 30, 2022

Miners like Core Scientific and Argo are feeling the impacts of falling cryptocurrency values . For now, they are waiting for a bailout to get them out of the crisis.

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Cryptocurrency miners are beginning to suffer from the fall in the values ​​of the largest ones such as bitcoin and some have already declared bankruptcy.

Core Scientific and  Argo  are close to filing for “protection under Chapter 11 of the United States Bankruptcy Law.” Its destiny is set and it has frightened its small investors.

The Core Scientific case

Core Scientific provided 10% of the information power to power the entire bitcoin network in the world. It houses more than 143,000 specialized equipment, a large investment that is not profitable given the market decline.

In the third quarter of 2022, the mining company had assets of $1.4 billion and liabilities of $1.3 billion, according to its earnings release. Even if it was in “positive” it would not be enough to pay off the debt you have with your creditors.

The bank B. Riley had proposed to the company a “new financing plan for 72 million dollars” for the mining company to avoid bankruptcy. However, the mining company submitted the request anyway, angering the bank, which assured that “most of their problems are taxes that can be corrected.”

In its documentation, the company “seeks a deferral of its outstanding payments.”

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