Among the many news surrounding Bitcoin lately, one rather bad major announcement has just come out – CoinTerra, a company involved in Bitcoin mining, has just filed for Chapter 7 bankruptcy protection, which means that they will probably liquidate all of their assets in order to repay secured creditors. Currently, according to reports, the company has between $10 and $50 million in assets, and its liabilities fall in roughly the same range as well. This has been pointed out by publications after a review of related court documents.
In the filing which the company submitted on January 24, the company stated that it will be unable to repay various unsecured investors, and they have named hundreds of creditors in their official documentation. The company has been in hot waters recently, after they got sued by C7 Data Centers, a Utah-based data center company that claimed they were owed $1.4 million in unpaid service fees, plus $4 million in damages. There were indications as early as the beginning of January that the company was facing debt issues, although those reports were never confirmed until today.
C7 Data Centers were, unsurprisingly, present in the list of creditors submitted in the court case. Other companies on the list include Wells Fargo, CenturyLink, and other prominent names in the financial and tech sectors. In addition, various private citizens were named in the list, including people from the United States and other countries.
CoinTerra have put up a notice on their website acknowledging the situation, and directing users to the case filing for their bankruptcy. They have set up a creditor meeting scheduled for February 27, where they plan to discuss how each creditor is going to be repair in the foreseeable future.
Recent negotiations between the company and its creditors have apparently failed, and Ravi Iengar, CEO of CoinTerra, recently gave an interview according to which the company relied very heavily on the outcome of those negotiations for its future operations. At this point, it’s hard to say how soon the situation around the company will be resolved, but it’s definitely shaping up to be a very difficult one, not just for the company itself, but also for its creditors.
This has also shaken up the Bitcoin market as a whole, as CoinTerra wasn’t a small player in this field, and their crash has resonated throughout the market very heavily. It’s not known how long those effects will be felt for, but these recent news have definitely not helped in improving the public’s opinion about the cryptocurrency. Bitcoin needs a lot of public support in order to thrive, so hopefully accidents like this will not very common in the near future.