<p><span data-contrast="auto">Core Scientific, </span>the largest <span data-contrast="auto">bitcoin miner by computing power, filed for Chapter 11 bankruptcy protection as this year's slump in crypto prices claimed another victim.</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">The company estimated its assets and liabilities at between $1 billion and $10 billion, according to the filing with the U.S. Bankruptcy Court for the Southern District of Texas on Wednesday.</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">Core’s struggles reflect those of the entire mining industry, which has seen profit margins continuously shrink, as bitcoin prices decline and energy costs go up. </span><a href="https://www.theblock.co/post/191343/bitcoin-mining-revenues-fell-20-in-november"><span data-contrast="none">Revenues fell 20%</span></a><span data-contrast="auto"> just last month, according to data from The Block Research.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">Core Scientific estimated it had between 1,000 and 5,000 creditors, with $42.4 million owed to its largest creditor, financial services firm B. Riley.</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">The company runs its own machines and acts as a hosting provider for others. Between the two sides, it operates about 24.4 EH/s, according to an October update, compared to the roughly 244 EH/s of the entire network.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">The company </span><a href="https://www.theblock.co/post/180358/core-scientific-to-run-out-of-cash-by-the-end-of-2022"><span data-contrast="none">warned in October</span></a><span data-contrast="auto"> that it could run out of cash by the end of the year. Things seemed to be turning around last week, with B. Riley offering the miner a $72 million financing package and arguing that bankruptcy was not the answer to Core’s problems. It’s unclear where that offer now stands. </span></p> <p><span data-contrast="auto">The Block reached out to both firms but did not hear in time for publication.</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">Mining companies Argo Blockchain and Greenidge Generation have also recently floated the possibility of an impending bankruptcy, while hosting provider Compute North already </span><a href="https://www.theblock.co/post/172246/compute-north-files-for-chapter-11-bankruptcy"><span data-contrast="none">filed</span></a><span data-contrast="auto"> for Chapter 11 protection back in September.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">Both companies are trying to avoid that fate, with Argo </span><a href="https://www.theblock.co/post/194230/bitcoin-miner-argo-accidentally-said-its-filing-for-chapter-11-but-is-actually-trying-to-avoid-that-fate-by-selling-assets"><span data-contrast="none">saying last week</span></a><span data-contrast="auto"> that it was in "advanced negotiations with a third party" to sell certain assets and secure equipment financing, after accidentally stating on the website that it was filing for chapter 11 bankruptcy. Greenindge, meanwhile, entered into a non-binding debt restructuring deal with its lender NYDIG to </span><a href="https://www.theblock.co/post/196461/greenidge-deal-with-lender-nydig-would-see-miner-shift-to-hosting"><span data-contrast="none">pay down $74 million in debt</span></a><span data-contrast="auto"> by selling off assets.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <h2 aria-level="2"><b><span data-contrast="none">Insufficient cash flow</span></b><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559738&quot;:40,&quot;335559739&quot;:0,&quot;335559740&quot;:259}"> </span></h2> <p><span data-contrast="none">While Core Scientific is still generating positive cash flow, it's not enough to repay debt owed on the Bitcoin mining equipment it leases, CNBC </span><a href="https://www.theblock.co/post/196884/bitcoin-miner-core-scientific-set-to-file-for-chapter-11-bankruptcy-protection-cnbc"><span data-contrast="none">reported</span></a><span data-contrast="none"> earlier, citing a person familiar with the situation.</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="none">Core’s total debt was around $1 billion as of October, the company said. Among its </span><a href="https://www.theblock.co/post/180546/massmutual-blockfi-are-among-bitcoin-miner-core-scientifics-biggest-creditors"><span data-contrast="none">list of creditors</span></a><span data-contrast="none"> is the now-bankrupt crypto lender BlockFi, crypto financial services firm NYDIG and Anchor Labs, the parent company of digital asset bank Anchorage Digital.</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="none">"In the event of a bankruptcy proceeding or insolvency, or restructuring of our capital structure, holders of the company’s common stock could suffer a total loss of their investment," the company said in a U.S. Securities and Exchange Commission </span><a href="https://www.sec.gov/Archives/edgar/data/1839341/000119312522270236/d395956d8k.htm"><span data-contrast="none">filing</span></a><span data-contrast="none">.</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="none">Core will continue to operate normally while reaching a deal with senior security noteholders, CNBC also reported.</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="none">A large portion of Core Scientific's loans were taken out to finance hardware and infrastructure improvements, most starting in the second half of 2021, when bitcoin prices were on the rise (reaching a peak of nearly $70,000 in November) and miners were racing to grow their operations.</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="none">Core Scientific is involved with an </span><a href="https://www.theblock.co/post/176589/core-scientific-wants-celsius-to-pay-its-mining-bills-amid-bankruptcy-process"><span data-contrast="none">ongoing legal dispute</span></a><span data-contrast="none"> with the mining arm of also bankrupt crypto firm Celsius over what it claims are unpaid bills.</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="none">The company's shares had fallen 23.5% in pre-market trading as of 6.30 a.m. ET. </span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><i><span data-contrast="none">The case is number: 22-90342.</span></i><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><em>This article was updated after publication to include more context. </em></p><br /><span class="copyright"><p>© 2023 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.</p> </span>