According to a source, the bankruptcy proceedings will have no effect on operations.
According to CNBC, Core Scientific, one of the industry’s largest bitcoin miners, plans to file for bankruptcy in Texas on Wednesday morning, but will continue to mine bitcoin throughout the process.
While many mining companies have declared bankruptcy during the bear market, Core Scientific is the first publicly traded company to do so. Greenridge, a bitcoin miner, reached a debt restructuring agreement with NYDIG on Tuesday, allowing the company to avoid bankruptcy for the time being.
Binance Pool launched a $500 million fund in October to provide emergency financing to distressed miners, with loans collateralized by physical assets as well as the cryptocurrency mined by the companies. Bitmain has also announced the launch of a $250 million fund with a similar mandate.
The stock of Core Scientific is down 98% year 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 for Core Scientific, allowing it to avoid bankruptcy.
“The vast majority of Core Scientific’s issues, in our opinion, are self-inflicted 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 a positive cashflow, but its income is insufficient to cover the financing costs of its mining equipment due to the bear market.