Compute North has recently made an announcement in regard to filing for bankruptcy. The company has reasoned that the crypto winter has cornered them, forcing them to make the decision of filing bankruptcy.

Chapter 11 Bankruptcy

Compute North, a major mining hosting firm for Bitcoin (BTC) has just announced that it was forced to file for bankruptcy.

The mining company has confirmed that it was the Chapter 11 bankruptcy it proceeded with filing. The company revealed that the cryptocurrency winter has been ongoing for a long time.

The downtrend of the cryptocurrency industry seems to be unending. If it is not unending, then it is going to be long-term and their company could not handle that pressure.

The energy costs have been rising tremendously and the crypto winter has caused the prices of Bitcoin to suffer tremendously. This is the reason why Bitcoin is not proving to be a beneficial mining asset for their firm anymore.

As the company has filed for bankruptcy, Dave Perrill, the CEO of the company has announced that he has stepped down from his position. Although he is no longer the CEO he would continue being part of the board of directors.

Bankruptcy Submitted at the US Court

The sources have confirmed that the legal teams from Compute North submitted the relevant documentation for the bankruptcy at the Bankruptcy Court of the United States.

The particular court is responsible for dealing with such cases for the Southern District in the state of Texas. The reports confirm that the bankruptcy was filed by the legal teams on Thursday.

For now, the decision is with the court and the judge presiding over the case is David Jones. The judge is yet to confirm whether the request for Chapter 11 bankruptcy would be accepted or not.

Reason for Filing Chapter 11

According to the law, the entity filing the Chapter 11 bankruptcy does not have to shut down its operations and fully decommission itself.

Instead, the particular entity filing for bankruptcy is able to keep its operations up and running. However, it allows the firm to operate without expecting pressure coming in from creditors or investors.

Once the bankruptcy is granted approval, the firm can start working out a plan that should allow it to pay back its creditors and lift the company.

Money Owed by Compute North

According to figures, Compute North has 200 creditors, to whom it owes around $500 million. The assets currently under the possession of the mining firm range from $100,000,000 to $500,000,000

Compute North has now joined the same list as other major crypto companies that have filed for bankruptcy. These companies include BlockFi, Celsius Network, Three Arrows Capital, and Voyage Digital.