Compute North, one of the largest operators of crypto-mining data centers, filed for bankruptcy and revealed that its CEO stepped down as the rout in cryptocurrency prices weighs on the industry.
The company filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas, according to a filing.
Compute North in February announced a capital raise of $385 million, consisting of an $85 million Series C equity round and $300 million in debt financing. But it fell into bankruptcy as miners struggle to survive amid slumping bitcoin (BTC) prices, rising power costs and record difficulty in mining bitcoin. The filing is likely to have negative implications for the industry. Compute North is one of the largest data center providers for miners, and has multiple deals with other larger mining companies.
Read more: Crypto Miners Face Margin Calls, Defaults as Debt Comes Due in Bear Market
“The Company has initiated voluntary Chapter 11 proceedings to provide the company with the opportunity to stabilize its business and implement a comprehensive restructuring process that will enable us to continue servicing our customers and partners and make the necessary investments to achieve our strategic objectives,” a spokesperson told CoinDesk in an emailed statement.
CEO Dave Perrill stepped down earlier this month but will continue to serve on the board, the spokesperson added. Drake Harvey, who has been chief operating officer for the last year, has taken the role of president at Compute North, the spokesperson said.
Compute North has four facilities in the U.S. – two in Texas and one in both South Dakota and Nebraska, according to its website.
Some of the company’s partners include Marathon Digital (MARA), where Compute North has brought online 40 megawatts (MW) of a 280MW wind-powered facility at its Upton County in West Texas. Bitcoin mining hosting and brokerage services firm Compass Mining also said recently that it will work with Compute North on a 75MW hosting partnership for its Granbury, Texas, data center. Compass said in a Tweet that its reviewing the…