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Core Scientific joins list of crypto companies filing for bankruptcy

Core Scientific joins bankrupt crypto companies
Core Scientific joins bankrupt crypto companies

Image source: Twitter

Core Scientific: Core Scientific is one of the most well-known publicly traded cryptocurrency mining companies with American headquarters.

However, rumors claim that the Texas-based company would file for Chapter 11 bankruptcy protection on Wednesday morning.

After a year of escalating energy costs and declining cryptocurrency values, the corporation decided to file for bankruptcy.

The company

When mining Bitcoin and other proof-of-work currencies, Core Scientific has always been one of the most prolific companies.

The company uses a technique to provide electricity to data centers nationwide.

It is filled with highly specialized computers to validate transactions and create new tokens.

The process requires the following:

  • Expensive equipment
  • Technical know-how
  • Plenty of electricity

Market cap

At the end of trading on Tuesday, Core Scientific had a market value of $78 million.

The company’s current value was lower than its $4.3 billion valuation when Core Scientific went public in July 2021 through a special purpose acquisition vehicle (SPAC).

The stock fell more than 98% in the previous year.

Despite the company’s positive cash flow, it is not enough to cover the debt related to the equipment it was leasing.

The senior security noteholders, who are in charge of the majority of the company’s debt, will be bargained with while Core Scientific continues to operate as usual.

Most of the information was obtained from an unnamed source who asked to remain anonymous to discuss sensitive business matters.


The company issued a bankruptcy warning toward the end of October.

At the time, Core Scientific’s stock price had decreased by 97%.

The company also cautioned ordinary stockholders that their investments might be lost.

It might not be the case, though, if the industry recovers.

If the Bitcoin economic environment improves, the deal with Core’s convertible note holders is structured so that common equity investors wouldn’t lose everything.

Additionally, Core Scientific revealed that it wouldn’t make the loan installments due in late October and early November.

The company also said that they could be sued for nonpayment by creditors.

Read also: Elon Musk addresses Tesla shares decline, cites other factors

Token drops

The token’s value fell from a record high of $69,000 in November 2021 to over $16,800 at Core Scientific, which primarily mines Bitcoin.

Reduced value, heightened mining rivalry, and rising energy prices constrained its profit margins.


The company is based in Austin, Texas and has operations in North Dakota, North Carolina, Georgia, and Kentucky.

As further mentioned in the October filing, operating performance and liquidity were impacted by the prolonged decrease in the price of Bitcoin and the increase in electricity rates.

Core Scientific also noted the increase in the hash rate—a metric used to show the computational power of miners in the Bitcoin network—across the whole Bitcoin network.


In July, the crypto-lending site Celsius filed for bankruptcy.

The company stated that it had $167 million in cash on hand to cover expenses while stabilizing its business.

Celsius made headlines for locking off customer accounts a month before filing for bankruptcy.

The crypto-lending company was one of Core Scientific’s clients.

The pressure that Celsius’s bankruptcy proceedings placed on Core’s balance sheets is an example of how the crypto industry was impacted in 2022.

Read also: Sherrod Brown seeks to ban crypto in the United States

Other companies

Core Scientific is one of the largest hosting and blockchain infrastructure providers in North America.

In addition, it is one of the major digital asset miners.

Despite its significance, Core is just one of several businesses that are having trouble.

Compute North, which provides hosting and infrastructure for cryptocurrency mining, filed for Chapter 11 bankruptcy in September.

Marathon Digital Holdings, another miner, declared an $80 million exposure to Compute North.

Meanwhile, a vertically integrated cryptocurrency miner called Greenidge Generation reported second-quarter net losses of more than $100 million in August.

The company eventually gave up on its plans to expand in Texas.

Last but not least, shares of Argo dropped 60% after the company announced plans to raise $27 million with a strategic partner on October 31.

But that was no longer happening.


Bitcoin miner Core Scientific is filing for Chapter 11 bankruptcy – but plans to keep mining

Embattled crypto lender Celsius files for bankruptcy protection

Bitcoin miner Core Scientific issues bankruptcy warning and the stock is down 97% for the year

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