Core Scientific, the largest publicly traded U.S. cryptocurrency mining company, is filing for bankruptcy protection, according to people familiar with the matter. (Archyde.com)
[Financial Channel/Comprehensive Report]Core Scientific is the largest publicly listed cryptocurrency mining company in the United States, but according to people familiar with the matter, Core Scientific filed for bankruptcy protection in Texas under Chapter 11 of the Bankruptcy Code on Wednesday (21st) , but even so, the company will not be liquidated and will continue to operate normally.
“CNBC” reported that people familiar with the matter said that Core Scientific is still generating positive cash flow, but the cash is not enough to repay the financing costs required for its leased equipment. The senior noteholders for most of the company’s debt, reached an agreement.
As of the close on Tuesday (20th), Core Scientific’s market value fell to US$78 million, far below the company’s US$4.3 billion valuation when the SPAC was listed in July 2021. Core Scientific is down more than 98% in 2021.
Core Scientific mainly produces bitcoin, but as the price of bitcoin has fallen, coupled with greater competition among cryptocurrency miners and rising energy prices, Core Scientific’s profit margins have been severely affected.
The cryptocurrency lending platform Celsius, which filed for bankruptcy protection in July this year, is a core customer of Core Scientific. After the platform went bankrupt, it put pressure on Core Scientific’s balance sheet. This is also a major example of the contagion of the cryptocurrency circle crisis this year.
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