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U.S. crypto miner Core Scientific files for Chapter 11 bankruptcy, continues to mine Bitcoin

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Core Scientific, one of the largest publicly traded crypto mining firms in the U.S. listed on Nasdaq as $CORZ, filed for Chapter 11 bankruptcy protection in the state of Texas on Wednesday morning, according to CNBC.

See related article: Will Bitcoin’s true value prevail in 2023?

Fast facts

  • Core Scientific is still generating positive cash flow, but it is insufficient to repay the financing debt for equipment leasing, an unnamed person familiar with the company’s finances told CNBC.
  • Instead of liquidating, the company will continue regular mining operations while trying to reach a deal with senior security noteholders, who hold most of the firm’s debt, according to the anonymous source. 
  • Core Scientific specializes in mining proof-of-work cryptocurrencies, mainly Bitcoin, which requires costly equipment and an abundant, consistent energy source.
  • The company owns approximately 5% of Bitcoin’s global hash rate, according to data from Hashrate Index.
  • Bitcoin, the world’s largest cryptocurrency, is currently down around 75% from its all-time high of US$69 in November 2021, trading at US$16,881 at 6:45 p.m. in Hong Kong.
  • The loss in Bitcoin’s value and higher energy prices have narrowed profit margins of BTC miners worldwide.

See related article: Bitcoin mining difficulty drops more than 7% as cash crunch hits miners

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