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Compute North Holdings, which owns data centers occupied by bitcoin-mining entities and other cryptocurrency operations, filed for Chapter 11 bankruptcy.
Compute North operates four U.S. data centers, two in Texas and one each in Nebraska and South Dakota, and is developing a third in Texas. Its assets are worth between $100M and $500M, according to the Chapter 11 filing.
The Minnesota-based company said in its filing that it owed as much as $500M to at least 200 creditors, and has been squeezed by the crash in bitcoin prices, high energy prices and Ethereum's move away from mining. Compute North now expects to either reorganize or pursue a sale of its assets.
Bitcoin prices have been in decline for nearly all of 2022, and on this week's news of another interest rate hike from the Federal Reserve, fell below $20K to reach an annual low after reaching an all-time high almost a year ago.
This summer, Generate Lending, one of Compute North's primary creditors, asserted technical defaults against the company and took control of some of its material assets, The Wall Street Journal reports, as well as bank accounts. This rendered the company unable to complete development of its new data center.
Early this year, before the complete collapse of cryptocurrency prices, the company closed a fundraising round totaling $85M in equity and $300M in debt to support further growth.
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