Bitcoin miner Iris Energy unplugs hardware collateralizing over $100 million in loans

Quick Take

  • Iris Energy unplugged miners used as collateral for over $100 million in debt after receiving a default notice from its lender.
  • The machines represented a large majority of the company’s hash rate, freeing up about 90 megawatts of power capacity, which it now plans to use for exploring other opportunities.

Bitcoin miner Iris Energy has unplugged a large majority of its miners in response to a default notice on about $107.8 million in loans they were securing.

However, the company said that its data center capacity and development pipeline will be "unaffected" by the move, in a U.S. Securities and Exchange Commission filing Monday. It freed up about 90 megawatts of capacity at a time when machine prices have fallen steeply.

"The group continues to explore opportunities to utilize its available data center capacity, recognizing the current scarcity of industry hosting data center capacity, and the prospect of utilizing $75 million of prepayments already made to Bitmain in respect of an additional 7.5 EH/s of contracted miners for further self-mining," Iris said in a statement.

The company had previously stated that given current mining economics the machines weren't making enough money to pay for loans, generating around $2 million in BTC per month in gross profit, versus the $7 million in debt obligations.

Earlier this month, Iris was served with a default notice from its lender and now expects it to call back the machines.

Having turned off about 3.6 EH/s worth of machines, the company said its computing capacity is now roughly 2.4 EH/s when accounting for 1.3 EH/s of miners in transit or pending deployment and 1.1 EH/s of machines in operation.

"The Facilities were intentionally structured for prudent risk management to protect the underlying business and data center infrastructure the Group has built (i.e., without a parent company guarantee and without recourse to any other Group entities)," the company also said, adding that it has no other outstanding debt facilities.

As of Oct. 31, Iris had $53 million of cash and cash equivalents. 


© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.