Core Scientific, a well-known crypto and Bitcoin mining giant firm in North America, has filed for Chapter 11 bankruptcy, CNBC reports. According to the firm, bankrupt Celsius was once its customer but after the firm liquidated its assets due to insolvency, the miner’s financial stability went on the crisis.
The platform filed the case this Wednesday but claimed that they will still continue towards positive growth and mining despite being insolvent.
Core Scientific mines cryptocurrencies built on a proof-of-work consensus mechanism in which high computation power and mathematical equation solutions are required to validate transactions and create a new coin. Bitcoin is the largest PoW cryptocurrency in the world, so most of its investments were made on this coin.
Nonetheless, the consistent market crash and bear market halved the value of crypto mining, which affected Core Scientific. According to the statement, its valuation dropped to $78 million as of Tuesday stats from $4.3 billion (July 2021). Crypto lending platform Celsius’ bankruptcy also affected Core Scientific.
Although the firm promises to keep the positive cash flow, it’s still not enough to pay back its debt. Thus, it decided to file for insolvency in the Texas court.
Core Scientific isn’t the only miner to suffer, Greenidge Generation, Marathon Digital Holdings, and Compute North also dropped to an all-time low due to the crypto winter.
