According to a report by CNBC, but will continue to mine bitcoin throughout the process.
While many mining companies have experienced financial distress during the bear market, Core Scientific is the first publicly listed company to declare bankruptcy. On Tuesday, bitcoin miner Greenridge reached a debt restructuring deal with NYDIG that will allow the firm to avoid bankruptcy for now.
Compute North, which operates data centers that host many miners' operations, filed for bankruptcy in September. Generate Capital, a financer of Compute North, said the firm asserted several "technical events of default" in July as crypto prices plummeted during the implosion of Three Arrows Capital. Marathon Digital, a rival of Core Scientific, said that it only expects to recover less than half of the $50 million it deposited with Compute North for services.
In October, Binance Pool launched a $500 million fund that would provide emergency financing for distressed miners, collateralizing the loans with physical assets as well as the crypto mined by the companies. Bitmain has also launched a $250 million fund with a similar mandate.
Core Scientific's stock is down 98% on-year, while rival Riot Blockchain (RIOT) is down 83%, and Marathon Digital Holdings (MARA) is down 88%.
Earlier in December, investment bank B Riley proposed a $72 million financing plan that would allow for Core Scientific to avoid bankruptcy.
"In our opinion, the vast majority of Core Scientific's issues are self-imposed and can be corrected in conjunction with an open, transparent discussion and ongoing participation with its creditors and equity holders," B Riley said in a statement.
In early November, bondholders began working with restructuring attorneys at Paul Hastings to propose an alternative to bankruptcy, Bloomberg reported at the time. Later that month the company reported that it ended October with $32 million in cash and warned it might run out of cash by year's end due to the rising cost of financing, soaring energy prices, and a compressed price of bitcoin.
Core Scientific maintains positive cashflow, but its income, impacted by the bear market, is not enough to cover financing costs of its mining equipment.