• Core Scientific has officially filed for bankruptcy following a decline in the firm’s operating performance and liquidity.
• The filing was necessitated by a decline in the price of bitcoin, an increase in electricity costs, and payment failures by hosting customers.
• Core Scientific plans to continue operating normally during the restructuring process and remain cash flow positive upon emergence.
Core Scientific, a giant bitcoin miner, has officially filed for bankruptcy in the United States. This decision comes after the company underwent a comprehensive review of potential alternatives and held exhaustive discussions with various company stakeholders. The decline in the firm’s operating performance and liquidity, caused by the prolonged decrease in the price of bitcoin, the increase in electricity costs, and the failure by certain of its hosting customers to make payments, necessitated the filing of Chapter 11 in the US.
Core Scientific hopes to enter into a restructuring support agreement with the Ad Hoc Noteholder Group, which represents more than 50% of the holders of its convertible notes. The company has taken steps to decrease monthly costs, delay construction expenses, reduce and delay capital expenditures, and increase hosting profitability in response to these factors.
In order to navigate the restructuring process, Core Scientific is committed to operating normally, and will continue to operate its existing self-mining and hosting operations. The company expects to remain significantly cash flow positive on a debt-free basis upon emergence. Core Scientific is dedicated to providing hosting services and self-mining in its state-of-the-art data centers.
The filing of bankruptcy by Core Scientific is the latest example of the difficulties faced by the cryptocurrency industry, as the prolonged decrease in the price of bitcoin and the increase in energy costs have made it difficult for miners to remain profitable. With their restructuring plans in place, Core Scientific appears to be confident that they will be able to emerge from bankruptcy as a strong and viable company.