Crypto mining data center operator Compute North filed for bankruptcy in Texas, marking the latest victim of the bear market environment marred by a steep drop in bitcoin prices and rising power costs. The petition was filed on Thursday in the Southern District of Texas US bankruptcy court.
According to the filing, the Minnesota-based firm owes as much as $500 million to a minimum of 200 creditors. Its assets are worth between $100 million to $500 million.
Under its estimation of available funds, Compute North stated that it would have no capital to distribute to unsecured creditors after payment of administrative expenses.
Compute North began in 2017 as a crypto mining firm, but changed its focus to providing co-location hosting services in 2018. In March, it grew to 100 employees and in April, it launched a 300-megawatt data center in Granbury, Texas, its website shows.
The firm last raised $385 million in debt financing in February, according to Crunchbase data. Mercuria, National Grid Partners and Generate Capital are among its investors.
Faltering bitcoin prices and increasing power costs have hurt crypto miners’ profitability, with many at-home miners who once minted money from their own garages finding they’re now struggling.
Arcane Research noted that daily revenue for bitcoin miners fell over 10% in the last week, generating $17.9 million per day — the lowest level since November 2020. That’s down from revenues of $62 million a day at the peak of the crypto bull market in November 2021.
Delays caused by Compute North’s energy provider prevented one of its biggest clients, Marathon Digital, from activating its mining machines for months, earlier this year. Marathon held about 40,000 mining machines in the firm’s West Texas facility, which had a 280-megawatt bitcoin mining facility.
Compute North and Marathon Digital didn’t return Blockworks’ request for comment by press time.