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Bitcoin Miner Core Scientific Files for Bankruptcy: Report

Once prominent Bitcoin miner – Core Scientific – is the latest one planning to file Chapter 11 bankruptcy protection in Texas.

Mining companies are experiencing turmoil and a lingering crisis of confidence in digital assets after the collapse of Sam Bankman-Fried’s FTX. While Bitcoin miners may not have had direct exposure to the now-collapsed crypto exchange, the subsequent turn of events and the ensuing price crash is threatening more of them with bankruptcy.

Core Turmoil

According to a CNBC report, Core Scientific’s market capitalization had plunged to $78 million as of the end of trading Tuesday, decreasing from a $4.3 billion valuation last July since the listing on the Nasdaq through a special purpose acquisition company, or SPAC.

Over the past year, its stock has depreciated by more than 98%. Despite generating positive cash flow, the cash is not sufficient for the company to repay the financing debt owed on equipment it was leasing. The firm does not plan on liquidation and instead will continue to operate normally.

Sources familiar with the company’s finances expect it to reach an agreement with senior security noteholders, holding the major chunk of its debt.

Attempts to Avert Bankruptcy

As a result of the distress, Core Scientific recently received an offer of $72 million to avoid bankruptcy from one of its top lenders – B Riley. The investment bank proposed a new financing plan that entailed providing non-cash pay funds on favorable terms with more than two years of runway for the company to achieve profitability.

In a statement, B Riley said that a vast majority of issues plaguing Core were self-imposed and went on to add that it can be corrected in conjunction with “an open, transparent discussion and ongoing participation with its creditors and equity holders.”

B Riley already has an outstanding loan of $42 million with Core. The bank stated that it prepared to fund the first $40 million of the new financing immediately, with “zero contingencies.” All principal payments to equipment lenders would need to be suspended until the Bitcoin price recovers to $18,500 for the remaining of the proposed financing.

Apart from Core Scientific, another prominent company in the space – Compute North – that hosted infrastructure for crypto mining filed for bankruptcy in September.


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