The Chicago Journal

Core Scientific reported to file for Chapter 11 bankruptcy

Core Scientific: Core Scientific is one of the most recognizable publicly traded crypto mining enterprises with an American base.

The Texas-based business reportedly intends to declare bankruptcy on Wednesday morning.

After a year of rising energy prices and plummeting bitcoin prices, the company decided to declare bankruptcy.

The company

One company that has mined Bitcoin and other proof-of-work currencies the most is Core Scientific.

The business employs a method to provide electricity to data centers nationwide.

There are incredibly specialized machines inside that verify transactions and produce new tokens.

The process requires the following:

  • Expensive equipment
  • Technical know-how
  • Plenty of electricity

Market cap

The market value of Core Scientific was $78 million at the close of trading on Tuesday.

Core Scientific valued the business at $4.3 billion when it went public in July 2021, utilizing a special-purpose acquisition vehicle.

But the company is currently valued at less than that amount (SPAC).

Over the previous year, the stock dropped by more than 98%.

Although the business has a healthy cash flow, it is insufficient to pay off the debt associated with its leasing equipment.

While Core Scientific continues to operate, as usual, the senior security noteholders, who are in charge of the majority of the company’s debt, will come to an agreement.

The person who gave the majority of the material did so under the condition of anonymity to speak about sensitive business matters.


At the end of October, the company issued a bankruptcy warning.

The stock price of Core Scientific decreased by 97% as a result.

The corporation likewise warned regular stockholders that their investments could be lost.

But if the sector rebounds, this might not be the case.

It is created so that common equity owners won’t lose everything if conditions surrounding bitcoin improve beyond the terms of the convertible note contract with Core’s holders.

The fact that Core Scientific missed the loan payments that were due in late October and early November was also brought up.

Additionally, the business said creditors are welcome to sue them for nonpayment.

Read also: Sam Bankman-Fried found to donate to lawmakers probing FTX collapse

Token drops

The token’s value at Core Scientific dropped from a record high of $69,000 in November 2021 to roughly $16,800.

The margins are under pressure from declining value, increased mining competition, and rising energy costs.


Although it has activities in North Dakota, North Carolina, Georgia, and Kentucky, the corporation is headquartered in Austin, Texas.

The protracted decline in the price of Bitcoin and the rise in electricity prices, which were also mentioned in the October filing, had a negative impact on operating performance and liquidity.

According to Core Scientific, the hash rate on the Bitcoin network has increased.


The crypto loan marketplace Celsius filed for bankruptcy in July.

According to the corporation, it has $167 million in cash on hand to pay down debt and continue its operations.

Before declaring bankruptcy, Celsius gained notoriety for freezing client accounts.

One of Core Scientific’s clients was the crypto-lending sector.

The pressure Celsius’s bankruptcy proceedings put on Core’s balance sheets illustrates how the cryptocurrency market was affected in 2022.

Read also: Elon Musk highlights macroeconomic factors for Tesla shares decline

Other companies

Core Scientific is one of the most prominent hosts and providers of blockchain infrastructure in North America.

It also mines a massive quantity of digital assets.

Core is only one of many failing enterprises, despite its importance.

In September, Compute North, a company that offers hosting and infrastructure for bitcoin mining, filed for Chapter 11 bankruptcy.

Another miner, Marathon Digital Holdings, disclosed an exposure to Compute North of $80 million.

In the meantime, Greenidge Generation, a vertically integrated cryptocurrency miner, disclosed second-quarter net losses of more than $100 million in August.

Finally, the business decided to give up on its Texas expansion plans.

Additionally, after the company disclosed plans to raise $27 million with a strategic partner on October 31, shares of Argo fell 60%.

However, that was no longer taking place.


Bitcoin miner Core Scientific is filing for Chapter 11 bankruptcy – but plans to keep mining

Embattled crypto lender Celsius files for bankruptcy protection

Bitcoin miner Core Scientific issues bankruptcy warning and the stock is down 97% for the year

Alex Mashinsky officially steps down after sending the Celsius Board of Directors his resignation letter

On September 27, 2022, Celsius CEO Alex Mashinsky stepped down and expressed regret for his role in the bankrupt cryptocurrency lending company.

Mashinsky said his time at the company as an executive has resulted in “increasing distractions.”

The resignation letter

A New York law firm announced on Tuesday that Alex Mashinsky had filed his “I have decided to step down as CEO of Celsius Network today,” the statement said.

“I elected to resign my post as CEO of Celsius Network today,” the statement reads.

“Nevertheless, I will continue to maintain my focus on working to help the community united behind a plan that provide the best outcome for all creditors – which is what I have been doing since the company filed for bankruptcy.”

“I believe we all will get more if Celsians stay united and help the UCC with the best recovery plan.”

“I remain willing and available to continue to work with the Company and their advisors to achieve a successful reorganization.”

In the letter, Mashinsky regretted the distraction his presence as CEO had brought to the company.

“I am very sorry about the difficult financial circumstances members of our community are facing.”

Alex Mashinsky was allegedly responsible for Celsius’ poor trading in early 2022, which later led to the cryptocurrency issuer’s bankruptcy.

Celsius and the rise in bankruptcy

In 2022, several cryptocurrency lenders witnessed the freezing of user withdrawals following the crash of the cryptocurrency markets in May.

Celsius was one of the first major cryptocurrency lenders to launch withdrawal and payment blocking.

Weeks of silence followed before Celsius filed for bankruptcy.

During the bankruptcy filing, the company announced that it had a $1.2 billion gap on its balance sheet.

On-chain data showed that Celsius quickly repaid the funds through several DeFi loans before filing for bankruptcy.

It turns out that this move was an attempt to avoid liquidating over $40 million in Bitcoin collateral.

Celsius eventually repaid the entire loan and got the money back.

Subsequent company operations and allegations

After repaying the loans, Celsius was allowed to sell the mined bitcoins to pay for its operations.

July data shows that the company’s business posted losses.

However, a New York judge ruled the decision would benefit investors.

Earlier this month, Vermont officials claimed Celsius had been unable to pay its debt since 2019.

Officials also claimed that Alex Mashinsky made false and misleading claims to exaggerate Celsius’ financial health.


CEO of bankrupt crypto lender Celsius Alex Mashinsky resigns