Core Scientific Files For Imminent Bankruptcy As Bear Market Continues
Core Scientific is among the most notable Bitcoin miners in the industry, and it just announced that it intends to declare Chapter 11 bankruptcy soon but will continue to mine BTC during the process.
Although numerous mining companies have declared bankruptcy during the ongoing bear market, Core Scientific is the first publicly traded company to do so. Greenridge, another Bitcoin miner, reached a debt restructuring agreement with NYDIG on December 20th, allowing the company to avoid bankruptcy for the time being.
Binance Pool launched a $500 million fund in October to offer emergency financing to distressed miners, with loans collateralized by physical assets along with the crypto mined by the companies. Likewise, Bitmain also launched a $250 million fund with a similar mandate.
Earlier this month, investment bank B Riley proposed a $72 million financing plan to keep Core Scientific from going bankrupt. Most of the main problems with Core Scientific, according to B Riley, are self-inflicted and could be corrected with an open, transparent discussion as well as ongoing participation with its equity holders and creditors.
For now, Core Scientific maintains a positive cashflow, but its income is insufficient to cover the financing costs of its mining equipment due to the bear market, hence the decision to file for bankruptcy.
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