Former largest Bitcoin mining pool Poolin files for bankruptcy

Poolin, once the world’s largest Bitcoin mining pool, has filed for Chapter 11 bankruptcy protection in the United States. The company intends to sell its mining sites in West Texas and wind down operations. Its debts amount to more than $173 million.

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Bankruptcy filing and scale of debts

On July 22, Poolin and two US subsidiaries, Lonestar Dream Inc. and Lonestar Taproot LLC, filed voluntary petitions with the bankruptcy court in New Jersey. Court documents show that the company expects between 10,001 and 25,000 creditors. Assets are estimated at $1 million to $10 million, while debts range between $100 million and $500 million.

More detailed figures from the court filings reveal total debt of around $173.1 million. Of that, as much as $163.7 million consists of so-called IOU notes that Poolin issued in 2022 to Poolin Wallet customers after the company temporarily suspended withdrawals. Whether creditors recover their money depends on the outcome of an auction and approval by the judge. Read more about the situation in the Bitcoin mining sector on our overview page.

From world leader to bankruptcy

Poolin was founded in 2017 and briefly held the position of the world’s largest Bitcoin mining pool in 2019. Thereafter followed a long decline. In 2022, the company halted all withdrawals via its own wallet, causing significant losses for many users. That decision now forms the basis of the enormous debt burden the company faces.

As part of the bankruptcy process, Poolin intends to auction its two mining sites in West Texas. The combined opening bid for these sites is $52 million. It is one of the few opportunities for creditors to recover part of their losses, reports The Energy Mag. The Bitcoin price is currently at $65K, a decline of 1.1% in the past 24 hours. The weak market conditions do not make the situation any easier for mining companies.