Just days after a creditor offered to help Core Scientific avoid possible bankruptcy, reports emerged confirming Bitcoin’s work
The fate of the mining company. Core Scientific is said to be filing for Chapter 11 bankruptcy protection in Texas due to declining revenue and falling BTC prices.
On December 14, financial services platform B. Riley offered to provide Core Scientific with $72 million in cashless financing — $40 million without any contingency and $32 million with strings — to retain value for stakeholders. The decision was made after Core’s valuation fell from $4.3 billion in July 2021 to $78 million at the time of writing.
As a direct result of an extended bear market, Core Scientific was forced to sell 9,618 BTC in April to stay in business. The CNBC report quoted a person familiar with the company’s finances as saying that the bitcoin mining company will file for Chapter 11 bankruptcy as early as December 21.
While the company continues to generate positive cash flows, the income is not enough to cover operating costs, which include paying off the lease for its bitcoin mining equipment.
The report also states that Core Scientific will continue mining operations and has no plans to go into liquidation. When B. Riley offered a lending hand, the company’s shares temporarily rose nearly 200%, but have since seen a steady decline.
Core Scientific share price movement on Nasdaq. Source: TradingView
On October 26, a primary science filing with the US Securities and Exchange Commission indicated financial distress. According to the company, the main reasons for this situation were falling bitcoin prices, increasing electricity costs, increasing global bitcoin hash rate, and the bankruptcy of crypto lender Celsius, which wiped out debts owed to Core Scientific.
Core Scientific has not yet responded to Cointelegraph’s request for comment.
Related: Bitcoin Mining Firm Greenidge Signs $74 Million Debt Restructuring Agreement With NYDIG
Tech giant Microsoft recently restricted its cloud users from mining cryptocurrencies as a measure to increase the stability of its cloud services.
As Cointelegraph reported, Microsoft updated its acceptable use policy on December 1 to clarify that “cryptocurrency mining is prohibited without Microsoft’s prior approval.”
The company said its goal is to protect customers by reducing the risk of disruption or disruption to services in the Microsoft Cloud.