Core Scientific’s bankruptcy has dealt a further blow to cryptocurrency.

The latest in the crypto industry to declare bankruptcy is a bitcoin mining company. With 243,000 servers, it contributed around 10% of the computer power used to secure the bitcoin network.

Core Scientific, a bitcoin mining company, is the latest crypto company to declare bankruptcy as the industry is shaken by the drop in digital currency prices.

The assets of the Texas-based corporation totaled $1.4 billion. In its Chapter 11 bankruptcy filing, the company listed $1.33 billion in liabilities.

Its stock, which had already lost 98% of its value, dropped 40% today.Section 11 of the United States Bankruptcy Code permits businesses to continue operating while they work out a repayment plan with their creditors.

Core Scientific stated in a statement that company aims to strike a restructuring arrangement with a group of convertible bondholders and continue mining.

Contributed 10% of the bitcoin network’s computational power

With 243,000 servers for mining the cryptocurrency, the firm contributes around 10% of the computational power to safeguard the entire bitcoin network.

The company ascribed its insolvency to decreasing bitcoin prices, skyrocketing energy costs, and the July bankruptcy of Celsius in documents accompanying the bankruptcy case.It had also overspent on costs to establish its mining operation, owing over $275 million for equipment purchases.

Listed on the New York Stock Exchange

Core Scientific is one of numerous mining firms that went public in 2021, prior to the cryptocurrency market crash.

However, the crypto winter and rising energy costs have thrown the industry into disarray, with many huge miners now suffering liquidity issues.

Source: https://www.bloomberg.com/