Core Scientific, one of the largest bitcoin mining companies in the US, has filed for creditor protection this wednesday, As the frenzy around the recession continues Token prices and the rising costs of the energy-intensive business of producing cryptocurrencies.
Core Scientific on Wednesday filed for Chapter 11 bankruptcy protection in Texas, where it is headquartered.
The company is still generating positive cash flow, but it’s not paying back financing debt for the equipment it needs. A bitcoin miner feeds into data centers across the country that have specialized computers that process mathematical equations to validate transactions and generate new “tokens” at the same time. This process requires expensive equipment, technical knowledge, and a lot of electricity.
“The filing of these cases was necessitated by the declining operational and liquidity performance of the company, which is experiencing a prolonged decline in the Bitcoin price [e] “The high costs of electricity required to operate the company’s data centers,” Core Scientific said in a statement.
However, the US company plans to continue producing bitcoins while negotiating a restructuring agreement with its creditors.
The high costs of cryptocurrency mining have already caused stocks to drop 98% year-to-date.
With this bankruptcy filing, Core Scientific then joins a group of other cryptocurrency miners who have succumbed to the market crash and soaring energy prices, such as FTX.
* Edited by Ines Santinhos Gonçalves
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