The public mining company and blockchain-hosting provider Core Scientific could exhaust its cash and cash equivalents by the end of the year. This information is contained in the filing with the SEC.
Currently, the company reports $26.6 million and 24 BTC (~$495,000) on its balance sheet. As of September 30, reserves stood at $29.5 million and 1,051 BTC.
Liquidity problems arose from a prolonged decline in Bitcoin’s price, higher electricity costs, rising hash rate, and involvement in litigation over the bankruptcy of the Celsius Network, the cryptocurrency-lending platform.
The latter has an outstanding debt of $5.4 million to the firm. Core Scientific noted that it relates to unpaid hosting services for equipment. The company had been a partner of the platform in implementing its investment programme for $200 million, related to mining.
Core Scientific warned the SEC that it would not meet its obligations at the end of October and in early November, including payment for equipment.
The company is examining options to navigate the difficulties. Management is considering raising additional capital or restructuring.
“Core Scientific could issue shares or bonds, defer capital expenditures, or sell assets. The company does not rule out filing for bankruptcy to shield itself from creditors,” the statement said.
In September, the industry faced its first major bankruptcy — the hosting provider Compute North filed for bankruptcy. Some companies such as Stronghold or Argo Blockchain are trimming costs and selling equipment.
In the same month, the mining-services provider Bitdeer created a $250 million fund to buy assets from troubled industry companies.
Subsequently, similar initiatives were undertakenBinance andGrayscale.
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