Core Scientific, the largest publicly traded Bitcoin mining company in the USA, will file for Chapter 11 bankruptcy on the morning of Wednesday in Texas.
Core Scientific joins the list of bitcoin miners that have fallen to the crypto market crisis and skyrocketing energy costs. Before a month ago, the Bitcoin miner had already hinted at severe operational difficulties and a liquidity shortage due to market conditions.
Core Scientific was digital mining files with evidence, such as Bitcoin. As is well-known, this necessitates using complex machinery, technology, and large amounts of electricity. Core Scientific (NASDAQ: CORZ) stock has dropped 99% during the past year, losing more than $4 billion in valuation.
The Bitcoin mining company has sought a public offering via a particular purpose acquire vehicle or SPAC in July 2021. According to sources familiar with the subject, despite the company’s healthy cash flow, it is insufficient to pay off the equipment loan.
Core Scientific Further Action Plan
According to the sources, core Scientific is not willing to liquidate. Still, it will continue to operate normally while negotiating with senior security noteholders, who own most of the company’s debt.
Core Scientific said in an October statement that stockholders might lose everything. However, if Bitcoin’s market conditions improve, common stockholders may not be wiped out.
The current locations of Core Scientific’s operations include North Dakota, North Carolina, Georgia, and Kentucky. Additionally, it is one of the largest blockchain infrastructures and hosting companies.