Core Scientific, which primarily mines bitcoin along with other proof-of-work cryptocurrencies, filed for Chapter 11 bankruptcy in Texas court today, citing soaring energy costs and plunging crypto prices. The company, however, plans to continue mining during the bankruptcy process.
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The troubled crypto miner still generates positive cash flow, but its revenue is not enough to repay debtholders for leased mining equipment, a person familiar with the company’s situation told CNBC. Core Scientific’s market capitalization currently stands at $78.9 million, down from a $4.3 billion valuation in July 2021.
The Austin-based company got listed on NASDAQ through the SPAC, a short for a special purpose acquisition company, in January 2022 and has since seen its stock tank 98%.
In its earlier October filing, quoted by CNBC, Core Scientific announced that “operating performance and liquidity have been severely impacted by the prolonged decrease in the price of bitcoin, the increase in electricity costs,” as well as “the increase in the global bitcoin network hash rate.”