Entries related to cryptocurrency mining operations

August 26, 2024

Bitcoin mining company Rhodium Enterprises files for bankruptcy

The Texas-based Rhodium Enterprises bitcoin mining company has filed for bankruptcy, disclosing debts between $50 and $100 million and total assets between $100 and $500 million. The company had tried to begin restructuring, but was not able to reach agreement among shareholders, and so decided to enter bankruptcy.

Bitcoin mining has been an extremely challenging business in recent times, partly due to volatile crypto prices over the last few years, and due to diminishing miner rewards following the April halving event.

Rhodium Enterprises had been showing signs of trouble, including failing to make scheduled loan payments earlier this month. In December 2023, a dispute between them and a subsidiary of the Riot Platforms bitcoin mining group culminated in armed security removing Rhodium employees from a bitcoin mining facility in Rockdale, Texas, where Rhodium was leasing bitcoin miners. The case was later sent to arbitration.

"Bitcoin miner Rhodium files for bankruptcy in Texas court", CoinTelegraph [archive]
"Texas Bitcoin Mining Operation Shut down by Host's Armed Security", Bitcoin Magazine [archive]

April 12, 2024

Australian NGS Crypto mining fund collapses

(attribution)

NGS Crypto, which sold "crypto mining packages" to interested investors, has been put into receivership. The Australian firm encouraged customers to set up a self-managed super fund — a type of retirement fund — to achieve returns they said were powered by crypto mining. The firms advertised returns of up to 16% annually, and promised that investors would receive 100% of their initial investment back at the term's completion — even "in the unlikely event that crypto mining becomes unprofitable".

NGS and its associated business is believed to have pulled in around AU$62 million (US$42 million) from around 450 Australians.

"Up to $150 million at risk as two Australian bitcoin schemes go bust", The Age [archive]

October 9, 2023

Bitcoin mining hardware manufacturer Bitmain stops paying employees

(attribution)

Bitmain, the manufacturer of popular Bitcoin mining equipment (known as ASICs), is apparently in such dire financial straits that it can no longer pay employee salaries. Local media reported that all "bonuses and incentives" were nixed by the Beijing-based company, and the firm is considering cutting all wages by 50%. They also wrote a letter to employees, informing them that they would not be paying out September salaries until a review later in the month.

"Bitcoin ASIC manufacturer Bitmain pauses employee salary payments: Report", CoinTelegraph [archive]

April 7, 2023

Bitcoin mining firm sues business partner after they allegedly lose $500,000 in Bitcoin to fraudster

(attribution)

Bitcoin mining firm Sphere 3D has filed a biting lawsuit against its partner, Gryphon Digital Mining. According to Sphere 3D, Gryphon's CEO was fooled by multiple spoofing attacks in which fraudsters pretending to be Sphere 3D executives instructed him to transfer 26 Bitcoin (~$500,000). Sphere 3D further alleges that "Gryphon panicked when Sphere suggested that the incident be reported to law enforcement, including the Federal Bureau of Investigations ('FBI'), insisted that the issue could be handled between the parties, and demanded that no one report the theft to the authorities."

The lawsuit also alleges that Gryphon has " dutifully collected its exorbitant Management Fee while shirking its duties under the MSA and delivering abhorrent management services" and "skimm[ed] off the top (i.e., st[ole]) from Sphere's assets".

December 26, 2022

BTC.com suffers $3 million attack

(attribution)

In a press release, BIT Mining reported that their subsidiary BTC.com had experienced a "cyberattack" in which $700,000 of customer assets were stolen. They also reported that $2.3 million of company assets were stolen, though they said that some of these funds had been recovered. They wrote that they were working with Shenzhen law enforcement to investigate the attack, but provided few details on the attack vector.

BTC.com is the seventh largest Bitcoin mining pool, which also operates other crypto mining services. Its parent company, BIT Mining, is publicly traded on the NSYE.

"Bitcoin mining pool BTC.com reports $3M cyberattack", Cointelegraph
"BIT Mining Limited Subsidiary Experiences Cyberattack", press release

December 21, 2022

Core Scientific Bitcoin mining firm files for bankruptcy

(attribution)

Core Scientific warned in October that it was teetering on the edge of bankruptcy, so it was no huge surprise when the company filed for bankruptcy protection on December 21. Core Scientific is one of the largest Bitcoin miners, responsible for around 10% of the computing power on the Bitcoin blockchain. The company operates around 143,000 miners, and host an additional 100,000.

Core Scientific is only one of many Bitcoin miners in distress, as low Bitcoin prices and other factors make mining much less profitable. Other mining firms, including Argo Blockchain and Greenidge Generation, have warned that they may face bankruptcy in the near future. Some firms, such as Iris Energy, have powered off a significant amount of their mining capacity.

December 12, 2022

Argo Blockchain faces possible bankruptcy

(attribution)

When the company accidentally published draft bankruptcy documents to its website, Argo Blockchain was forced to reveal that it is in last-ditch negotiations to raise capital. The company stated that they were still hoping to avoid a Chapter 11 filing, but that they were "at risk of having insufficient cash to support ongoing business operations within the next month". The company has been trying to raise $25–35 million since late August, and when a $27 million equity deal fell through in early November, the miner acknowledged it might soon have negative cash flow.

As a result of the inadvertent publication of bankruptcy documents, the London Stock Exchange and Nasdaq paused trading on the company's stock. The company published a statement saying they had requested trading be re-enabled, since they had not actually filed for bankruptcy (yet).

"Bitcoin Miner Argo Blockchain Says It's Close to Restructuring Without Having to Declare Bankruptcy", CoinDesk
"Restoration of Trading on the London Stock Exchange", Argo Blockchain

November 22, 2022

Iris Energy defaults on $100 million+ loan, unplugs miners

(attribution)

After announcing earlier in the month that they were close to defaulting on a $100 million+ loan, Iris Energy has defaulted. Unable to pay the $7 million/month in debt obligations with their $2 million/month gross profit, Iris Energy has powered off 3.6 EH/s worth of mining capacity.

Iris Energy's stock has plummeted to $1.66, down 93% from its $24.80 peak when the stock first began trading a year ago.

"Iris Energy to cut mining hardware after defaulting on $108M loan", Cointelegraph

November 22, 2022

New York institutes two-year ban on new crypto-mining operations at fossil fuel plants

An aerial photo of a power plant, with trees and a lake in the background

Greenidge Generation in upstate New York (attribution)

Governor Kathy Hochul signed legislation to ban for two years the issuance of permits to new crypto-mining operations at fossil fuel plants. This seeks to cut down on the enormous energy costs of proof-of-work crypto-mining used for cryptocurrencies such as Bitcoin.

New York has been the home of some battles against crypto-miners who have set up shop at dormant fossil fuel plants. The Greenidge Bitcoin mining operation near Seneca Lake has been the locus of some particularly bitter battles against the industry: a dormant coal power plant that was converted to natural gas and devoted to Bitcoin mining in 2019, its permit renewals have been the focus of fierce protests. It will not be affected by this particular legislation, which only bans mining operations who have not already submitted applications for new or renewed permits.

"New York Enacts 2-Year Ban on Some Crypto-Mining Operations", The New York Times

November 2, 2022

Iris Energy Bitcoin mining firm close to defaulting on loans of $103 million

(attribution)

Iris Energy, an Australian "sustainable Bitcoin mining company", has announced that they are close to defaulting on loans used to purchase $103 million of Bitcoin mining rigs. These machines depreciate in value quickly, and are currently estimated by the company to be worth $65–$70 million. At the moment, they produce $2 million in gross profit from mining Bitcoin, which is not sufficient for the company to meet the $7 million of loan payments each month.

"Financing and Bitmain Prepayment Update", press release
Tweet thread by Dylan LeClair

No JavaScript? That's cool too! Check out the Web 1.0 version of the site to see more entries.