Largest bitcoin miner Core Scientific stops payments to creditors

After that, the company's shares fell 70% in pre-market trading in the United States

27.10.2022 - 14:15

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2 min

What’s new? Core Scientific (CORZ), the largest bitcoin mining company, said that its financial resources may be depleted by the end of the year. Core Scientific officials said that if alternative capital raising options fail, the company may be forced to file for bankruptcy protection. Amid these statements, CORZ shares fell 70% in pre-market trading in the US. As of October 27 at 13:50 UTC, they are trading at $0,3, according to Investing.com.

Information on the CoinDesk website

What do Core Scientific representatives say? The company is exploring a number of strategic alternatives to raise additional capital. It has hired experts from Weil, Gotshal & Manges as legal advisors and PJT Partners as financial advisors.

Core Scientific officials said they will not make payments in late October and early November 2022 on several equipment loans. They added that creditors could sue the company for nonpayment or take action on collateral. Core Scientific is exploring various options to resolve the default, including hiring advisors, raising additional capital, or restructuring.

What is known about Core Scientific? Founded in the US in 2017, the mining company went public on the Nasdaq US Stock Exchange in January 2022. Core Scientific currently operates more than 180 000 ASIC devices, and its hashrate is 13 EH/s — about 5% of the Bitcoin network's global hashrate.

In June, the company sold 79% of its bitcoin reserves — 7202 coins worth $167 million. The funds were used to pay for ASIC servers, pay down debt and boost data center capacity. Core Scientific posted a net loss of $862 million in Q2 2022.

In September, analysts at Arcane Research noted that all cryptocurrency mining companies except for Argo Blockchain continue to suffer losses due to the bear market.

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