Compute North, a data center provider for cryptocurrency miners and blockchain companies, has filed for chapter 11 bankruptcy at a Texas court, as energy costs spiral and the crypto market’s prolonged slump continues.
The Minnesota-based company will continue to operate as it works out a plan to repay creditors. In the filing, it said it owed as much as $500 million to at least 200 creditors. Compute North estimated its assets are worth between $100 million and $500 million, according to the documents.
The company started out as a crypto mining operation in 2017, before pivoting to provide hosting services for other mining firms. Earlier this year, it faced delays in opening a large mining facility in Texas, due to local regulations, which likely dented its ability to generate profits.
Compute North’s clients include crypto mining giants Marathon Digital and Compass Mining. Both Marathon Digital and Compass Mining tweeted that they do not expect Compute North’s bankruptcy filing to impact on their business operations.
Compute North had raised $385 million in equity and debt financing in February, and has numerous deals with crypto miners including Hive Blockchain and Atlas Mining.
Its bankruptcy filing makes Compute North the latest major casualty of the ongoing crypto winter, with crypto broker Voyager Digital, crypto lender Celsius Network, and crypto hedge fund Three Arrows Capital all filing for bankruptcy earlier this year.
A combination of falling cryptocurrency prices and soaring energy costs has dented miners’ profits, with a closely-watched gauge of Bitcoin mining revenue dropping to a two-year low earlier this month.
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