(Bloomberg) – Compute North Holdings Inc., which provides data center services to cryptocurrency miners and blockchain companies, filed for bankruptcy in Texas on Thursday.
Compute North, based in Eden Prairie, Minnesota, said it owes at least 200 creditors $500 million. According to the Chapter 11 petition, the company’s net worth is between $100 million and $500 million.
Chapter 11 filings allow a company to continue in business while developing a plan to repay creditors. The company filed for bankruptcy to stabilize its business while it restructures under court protection, Cristian Majolsnes, head of marketing and sustainability at Compute North, said in an email.
According to the company’s website, Compute North started in 2017 as a crypto mining operation dedicated to co-location services that provide cheap electricity to data centers. In April, the company broke ground on a 300 MW colocation facility in Granbury, Texas.
The bankruptcy is the latest to hit the digital asset space, where falling cryptocurrency prices and rising US interest rates have driven investors away and triggered the collapse of lenders and hedge funds. Crypto broker Voyager Digital Ltd filed for Chapter 11 protection earlier this year, while trustees were called for bankrupt crypto hedge fund Three Arrows Capital.
Mining companies face renewed stress from low bitcoin prices and rising energy costs. A closely watched gauge of mining revenue fell to a two-year low earlier this month. Compute North must be transferred to its client Marathon Digital Holdings Inc. in Texas due to local state regulations. There was a delay in activating miners for .
About 40,000 miners are installed at the Company’s West Texas facility in Marathon, which has a capacity of about 280 MW. Compute North also operates data centers in North Dakota and Nebraska, according to its website.
The case concerns Compute North Holdings Inc., 22-90272, US Bankruptcy Court, Southern District of Texas.