Compute North, one of the largest crypto mining data center operators, has filed for bankruptcy, revealing that its CEO has stepped down as the cryptocurrency price weighs on the industry.
The company has filed for Chapter 11 bankruptcy in the US Bankruptcy Court for the Southern District of Texas, according to a filing.
Compute North in February announced a capital increase of $385 million, consisting of an $85 million Series C stock round and $300 million in debt financing. But it went bankrupt as miners struggle to survive amid falling bitcoin (BTC) prices, rising power costs and record difficulty when mining bitcoin. The filing is likely to have a negative impact on the industry. Compute North is one of the largest data center providers for miners and has multiple deals with other larger mining companies.
“The company has entered a voluntary Chapter 11 process to allow the company to stabilize its business and complete an extensive restructuring process that will enable us to continue to serve our customers and partners and make the necessary investments to support our strategic objectives,” a spokesperson told CoinDesk in an emailed statement.
CEO Dave Perrill stepped down earlier this month but remains on the board, the spokesperson added. Drake Harvey, who served as chief operating officer for the past year, has assumed the role of president at Compute North, the spokesperson said.
Compute North has four facilities in the US — two in Texas and one in both South Dakota and Nebraska, according to her website.
Some of the company’s partners include Marathon Digital (MARA), where Compute North has: brought online 40 megawatts (MW) from a 280 MW wind power plant in West Texas Upton County. Bitcoin mining hosting and brokerage services company Compass Mining also said: recently that it will work with Compute North on a 75 MW hosting partnership for its data center in Granbury, Texas. Compass said in a Tweet that it is reviewing the bankruptcy filings and that Compute North has informed the company that the filing must not interfere with mining operations.
Marathon too tweeted that the bankruptcy protection filings will not affect current mining operations and communications with Compute North.
Meanwhile, crypto miner Hive Blockchain (HIVE) also went a agreement with Compute North on March 7, for 100 MW of mining capacity. Marathon shares fell slightly in after-hours trading on Thursday, while Hive remained flat.
Additional deals that Compute North signed were based in Singapore, among others Atlas miningChinese crypto miner the9bitcoin miner BitNile Holdings (NILE), Bit digital (BTBT) and Sphere 3D (EACH). Shares of BitNile fell about 1% in after-hours trading, while Bit Digital rose slightly.
On July 14, Celsius Network’s mining unit, which in March said it planned to go public, also filed for Chapter 11 bankruptcy protection, along with its mother company, in the US Bankruptcy Court for the Southern District of New York. Meanwhile, Poolin Wallet, the wallet service of one of the largest bitcoin (BTC) mining pools, announced on September 13 that it will issue IOU (I Owe You) tokens to affected customers after the crash. froze recordings last week.
UPDATE (September 22, 2022 23:25 UTC): Updates with Marathon’s comments.
UPDATE (September 22, 2022 23:05 UTC): Updates with Compass Mining’s comments.
UPDATE (September 22, 2022 22:41 UTC): Updates with CEO exit and company comments.