Poolin, once one of the largest Bitcoin (BTC) mining pools in the world, has declared Chapter 11 bankruptcy in the United States. Singapore-based parent company Poolin, as well as its US subsidiaries Lonestar Dream Inc., submitted the application. and Lonestar Taproot LLC.
With this statement, companies request the liquidation of their remaining assets under court supervision. This will focus on mining infrastructures in Texas rather than reorganizing and continuing to operate under Chapter 11.
This would mark the end of the financial collapse that began during the bear market of cryptocurrencies in 2022.
pool under water
According to applicationsTotal assets and liabilities range from $1 million to $10 million and $100 million to $500 million, respectively.
A more accurate picture was shared in Restructuring Director Michael DuFrayne’s statement, which put total pre-bankruptcy liabilities at approximately $173.1 million.
Almost $163.7 million of this amount consists of unsecured debt. This amount is owed to Poolin Wallet users whose assets became inaccessible following the company’s withdrawal freeze in 2022.
What is the real reason behind this?
Here, Poolin’s wallet business, rather than mining operations, was the main source of his financial burden. This was because the company allowed users to deposit cryptocurrency, borrow USDT against collateral, and earn returns during the cryptocurrency boom.
Following the market crash in 2022, it suspended withdrawals and issued $163.7 million worth of IOU tokens to approximately 11,700 customers, making them unsecured creditors.
But problems worsened after he borrowed $213 million from Antalpha Technologies against cryptocurrency collateral. In the coming months, Poolin suffered major losses as Antalpha liquidated collateral as prices fell in late 2022. At the same time, mining expansion in the United States also failed.
Additionally, mining operations proved unsustainable. Eventually, following operating losses of approximately $45.9 million incurred by Lonestar Dream and Lonestar Taproot, Poolin closed its Texas facilities for mining and hosting on July 10.
And yet, despite your failure Bitcoin The mining operation marketed the assets to more than 335 potential buyers before declaring bankruptcy. This resulted in 28 confidentiality agreements and seven letters of intent.
In the past, the business had also tried to sell its Texas operations to China Green Agriculture for $49 million. However, the deal never materialized.
Poolin is currently trying to sell his remaining assets and give the money to his creditors through Chapter 11. However, the amount recovered for Poolin Wallet users is expected to depend on the outcome of the auction and will likely be much less than the $163.7 million owed to them.
Bitcoin miner’s situation raises concerns
This news comes right after AMBCrypto’s latest report In the Miners’ Financial Health Index, which shows that miners are under a lot of pressure. In fact, the CryptoQuant chart below further confirmed the prolonged period of miners’ capitulation.
According to the same data, the hashrate decline remained consistently negative and worsened to around -16% by July. Additionally, Bitcoin’s real hashrate also suddenly dropped to -12 starting in late January and has never fully recovered.
After all, many miners in the broader market are also taking machines offline. Especially with decreasing profitability.
Final Summary
- The firm’s total assets and liabilities range from $1 million to $10 million and $100 million to $500 million, respectively.
- Despite the difficulties, Poolin marketed the assets to more than 335 potential buyers before going bankrupt.
