Cryptocurrency miner Core Scientific files for bankruptcy

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Core Scientific, one of the largest publicly traded cryptocurrency mining companies in the United States, said on Wednesday (21) that it has filed for bankruptcy, the latest company in the sector to collapse after the crisis triggered by the drop in prices of digital currencies.

More than $1 trillion (R$5.2 trillion) in value has been wiped out of the cryptocurrency sector this year due to rising interest rates and worsening investor concerns about recession. The crisis eliminated the main names in the sector, such as the Three Arrows Capital fund, the Celsius Network bank and the FTX brokerage.

After skyrocketing gains in 2020 and 2021, bitcoin — by far the world’s most popular digital currency — has lost more than 60% of its value this year, putting pressure on the cryptocurrency mining sector.

Core Scientific said in a statement that the filing for court protection was necessary due to a decline in the company’s operating performance and liquidity amid the prolonged drop in the price of bitcoin.

The company’s shares have accumulated a devaluation of around 98% so far in 2022, reducing its market value to around US$ 78 million (R$ 405.8 million). Shares of other crypto miners including Riot Blockchain, Marathon Digital and Hut 8 Mining Corp are down more than 80% this year.

Core Scientific said its creditors have also agreed to provide up to $56 million (R$291.3 million) in funding. One of Core Scientific’s biggest creditors, B. Riley Financial, offered $72 million last week to save the bitcoin miner from bankruptcy.

In the request for judicial protection, Core Scientific said it has from US$ 1 billion (R$ 5.2 billion) to US$ 10 billion (R$ 52 billion) in assets and liabilities and between 1,000 and 5,000 creditors.

Core Scientific went public in 2021 through a merger with a blank check company in a deal that at the time valued the mining company at US$4.3 billion (R$22.4 billion).

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