Bitcoin (BTC) mining holding firm Compute North has filed for chapter 11 bankruptcy, amid growing pressure on the firm due to the effects of crypto winter and rising energy costs. The firm’s CEO Dave Perrill has also stepped down but will remain on the board.
Compute North’s hosting partners Compass Mining has claimed that the firm will continue to function as usual at this stage.
The company submitted a Chapter 11 bankruptcy filing in the U.S. Bankruptcy Court for the Southern District of Texas on Sept. 22, which is now undecided before Judge David Jones.
Under a Chapter 11 filing, the firm is still able to keep its operations going as it works out a plan to recompense creditors. The filing reportedly describes that Compute North owes around $500 million to 200 creditors, while its assets are alleged to be worth between $100 million and $500 million.
Compute North provides large-scale crypto mining hosting services and facilities, hardware, and a BTC mining pool. It is one of the largest data center providers in the U.S. has big name partners in the BTC mining sector such as Compass Mining and Marathon Digital.
Both companies tweeted, noting that with the information they have at this stage, their business operations will continue as usual.
The bearish performance of BTC in 2022 has had a substantial impact on the mining sector this year, and in the context of Texas, rising energy costs and multiple power outages during intense heat waves haven’t helped either.
Bloomberg Business reporter David Pan emphasized on Twitter that Compute North may have been wedged by a costly delay to a large mining facility in Texas that it wasn’t able to monetize for months.
Compute North adds to a long list of crypto firms that have either fallen victim to crypto winter — or in some cases helped create it — including Voyager Digital, Three Arrows Capital, Celsius Network and BlockFi to name a few.
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