Compute North is the latest crypto company to file for chapter 11 bankruptcy as the crypto winter is deepening.
Amid declining prices, crypto mining data centre Compute North has filed for Chapter 11 bankruptcy in a Federal court in Texas.
On Thursday, the firm filed a bankruptcy petition at the US Bankruptcy Court for the Southern District of Texas. According to the petition, initiating the proceedings will allow the company to achieve stability and restructure its operations.
Currently, the company owes about $500 million to 200 creditors, while it has assets worth between $100 million and $500 million. The firm stated that upon paying administrative expenses, it will not have funds left to distribute to unsecured creditors.
Compute North’s data centres provide services for some of the biggest mining companies in the United States. Their list of clients includes Compass Mining, Marathon Digital, Hive Blockchain, Atlas Mining, The9, and Bit Digital, among others.
Bankruptcy Filing Won’t Affect Operations
Following the announcement, Marathon Digital and Compass Mining took to Twitter to assuage the fears of their customers.
Marathon spokesperson noted that the filing would not impact the company’s mining operations based on the information they received.
Likewise, Compass Mining stated:
“(We were) informed that the bankruptcy filing should not disrupt business operations. We are continuing to monitor the situation and will provide further updates as they become available.”
Following the announcements, the post-trading share price of Marathon Digital fell on Thursday.
The End of an Era?
Compute North is the latest crypto company to file for chapter 11 bankruptcy as the crypto winter is deepening. While some firms are responsible for creating bearish conditions, others simply fell victim.
Three Arrows Capital was one of the first firms to plunge into liquidation, filing for chapter 15 bankruptcy. Voyager Digital, Celsius Network, Vauld, and Terraform Labs, soon followed suit.
This is not the first time the cryptocurrency market is experiencing a price crash. A similar occurrence that left many crypto firms gasping for breath happened in 2017. However, there have been concerns that the macroeconomic conditions that have led to the falling prices could spell doom for the industry.
Regardless, some cryptocurrency investors believe that is nothing new either. According to Bill Noble of Token Metrics, this is something all investors have to deal with. He said that “volatility is as old as the hills, and it’s not going anywhere.”