Core Scientific Files for Bankruptcy
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An editor at Coincrop
22 Dec 2022 | 3 min read
lthough news broke of their bankruptcy filing, Yahoo Finance data indicated that Core Scientific stocks still rose by 3% at the conclusion of trading on December 20th. On December 21st, publicly traded Bitcoin miner Core Scientific appealed to the Southern District of Texas bankruptcy court for Chapter 11 protection.
Court documents reveal the miner has staggering liabilities ranging from one to ten billion dollars. It is indebted to over 1,000 creditors with B. Riley Financial holding its biggest unsecured claim of $42.36 million. The company was accountable to additional creditors such as Dalton Utilities, Shell Energy, US Customs and Border Patrol, Kentucky Department of Revenue and more.
On Dec. 20, CNBC reported that Core Scientific was still generating a positive cash flow. However, the funds are not enough to finance the debts owed on its mining equipment.
Core Scientific was one of the crypto miners that made its public debut in 2021 amidst the SPAC boom. At its highest point, Core Scientific’s market capitalization reached an astounding $4.3 billion; however, it has since plummeted to a mere $78 million and seen an unprecedented 98% decrease in stock value on a year-to-date basis.
The miner had hinted at the possibility of a bankruptcy filing in October. At the time, it warned that holders of its common stock might experience a total loss of their investment if the industry does not recover.
Core Scientific's capacity and liquidity have been tremendously affected by bitcoin's drastic value decrease and the rise of electricity prices. To make matters worse, its customer Celsius declared bankruptcy, leading to substantial losses on Core Scientific's balance sheet which likely worsened their existing liquidity issues.
MikeAn editor at Coincrop
Mike is a Coincrop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely putting his latest car project back together.
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