BTC mining firm Compute North has filed for bankruptcy

Bitcoin (BTC) mining hosting firm Compute North has filed for Chapter 11 bankruptcy amid mounting pressure on the firm due to the effects of the crypto winter and rising energy costs. The firm’s chief executive, Dave Perrill, has also stepped down but will remain on the board.

The company filed for Chapter 11 bankruptcy in the US Bankruptcy Court for the Southern District of Texas on September 22, which is now pending before Judge David Jones.

According to the Chapter 11 filing, the company is still able to maintain operations as it works out a plan to pay back creditors. The filing reportedly outlines that Compute North owes about $500 million to 200 creditors, while its assets are said to be worth between $100 million and $500 million.

Compute North offers large scale hosting services and crypto mining facilities, hardware and BTC mining pool. It is one of the largest data center providers in the US, has major partners in the BTC mining sector such as Compass Mining and Marathon Digital.

Both companies issued statements via Twitter, noting that with the information they have at this stage, their business operations will continue as usual.

“Compute North staff informed us today that the bankruptcy filing should not interrupt business operations. We continue to monitor the situation and will provide further updates as they become available.” noted Compass Mining.

BTC’s lackluster performance in 2022 had a significant impact on the mining sector this year, and in the context of Texas, rising energy costs and multiple power outages during intense heat waves didn’t help either.

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Bloomberg Business reporter David Pan highlighted on Twitter that Compute North may have been hit by a costly delay at a major Texas mining facility that has failed to monetize for months.

“Compute North’s massive 280MW mining facility in Texas was supposed to start operations in April, but couldn’t due to pending approvals. From then until later this year, when he was finally able to power up the machines, bitcoin prices went through multiple down cycles, fundraising opportunities dried up, and major lenders folded,” he wrote.

Compute North adds to a long list of crypto firms that have either fallen victim to the crypto winter — or in some cases helped create it — including Voyager Digital, Three Arrows Capital, Celsius Network, and BlockFi, to name a few.