Core Scientific to File for Bankruptcy, Continue Mining Through Process: Report
Core Scientific, one of the industry's largest bitcoin miners, plans to file for bankruptcy Wednesday morning in Texas, according to a report by CNBC, but will continue to mine bitcoin throughout the process.
While many mining companies have experienced financial distress during the bear market, Core Scientific is the first publicly listed company to declare bankruptcy. On Tuesday, bitcoin miner Greenridge reached a debt restructuring deal with NYDIG that will allow the firm to avoid bankruptcy for now.
In October, Binance Pool launched a $500 million fund that would provide emergency financing for distressed miners, collateralizing the loans with physical assets as well as the crypto mined by the companies. Bitmain has also launched a $250 million fund with a similar mandate.
Core Scientific's stock is down 98% on-year, while rival Riot Blockchain is down 83%, and Marathon Digital Holdings is down 88%.
Earlier in December, investment bank B Riley proposed a $72 million financing plan that would allow for Core Scientific to avoid bankruptcy.
"In our opinion, the vast majority of Core Scientific's issues are self-imposed and can be corrected in conjunction with an open, transparent discussion and ongoing participation with its creditors and equity holders," B Riley said in a statement.
Core Scientific maintains positive cashflow, but its income, impacted by the bear market, is not enough to cover financing costs of its mining equipment.