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Gungun Bhatia
Oct 27, 2022
by Gungun Bhatia

Bitcoin Miner Core Scientific to Become Bankrupt By End of 2022

Core Scientific

Table of contents

  1. Addition of Creditors in Lawsuit
  2. Core Scientific to Investigate Strategic Choices
Core Scientific (CORZ), the biggest bitcoin miner in the world, predicted that the year's cash reserves would run out by the end, if not earlier. The firm stated in a filing on Thursday that there was a substantial question about its capacity to function for a sufficient amount of time. In U.S. pre-market trading, the company's shares, which came out publicly in January, dropped by approximately 30%.

Addition of Creditors in Lawsuit

According to a document made public on Thursday, the Austin, Texas-based business would forgo payments usually due in late October and early November 2022 on a number of its equipment and other financings. It added creditors can choose to file a lawsuit against the business for failing to pay or take action regarding collateral.

At the time of the filing, Core Scientific had 24 bitcoins, or roughly $495,000 at today's values, and about $26.6 million in cash, down from 1,051 bitcoins and nearly $29.5 million on September 30 of last month. The company said that the protracted decline in bitcoin's price, the rise in power prices, the increase in the hash rate of the whole bitcoin network, and the legal dispute with cryptocurrency lender Celsius had all had a negative influence on its business.

Core Scientific to Investigate Strategic Choices

In terms of the firm's financial structure, the company is now investigating a variety of potential strategic choices, including employing strategic consultants, raising extra funds, or reorganizing its current capital structure.

The problems of Core Scientific are an example of the depressed status of the bitcoin mining sector, where businesses are confined by high power costs and a flat bitcoin price. Compute North, a competitor of Core Scientific, declared bankruptcy in September after owing up to $500 million to at least 200 creditors.

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Bitcoin Miner Core Scientific to Become Bankrupt By End of 2022
Gungun Bhatia
Gungun is an enthusiastic writer that likes to create content for various aspects of the blockchain and crypto industry. She carries out extensive research and provides readers with informative and high-quality material.

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