According to recent reports, Core Scientific, one of the major cryptocurrency mining businesses, may seek bankruptcy protection under Chapter 11 in the state of Texas owing to declining income and low BTC pricing.
Core Scientific is having trouble remaining in business despite the consistent positive cash flows that it has been producing. This is because the company’s revenue is not adequate to cover its operating expenditures, which include the lease payback for the mining equipment that it uses.
CNBC was able to get information on Core Scientific’s desperation move from a source who is acquainted with the company’s financial situation. The Bitcoin mining firm planned to submit its Chapter 11 bankruptcy petition early on the 21st of December.
Core Scientific was given $72 million by B.riely, one of its key owners, a few days ago in the hopes of rescuing the company from its current predicament. He had devised strategies to reorganize the company’s debt as well as create liquidity for the business.
According to the report by CNBC, Core Scientific intends to keep running its mining activities and does not have any current intentions to liquidate. The company’s stock had a momentary jump of about 200% when B. Riley promised to give them some money, but it has suffered a gradual decrease ever since then.
Compiled by Coinbold