Dave Perrill, who served as the company’s CEO until he resigned earlier this month, will stay on the board and the COO will take over as president.
The mining industry is being negatively impacted by the collapse in cryptocurrency prices, and Compute North, one of the biggest operators of crypto-mining data centers, announced that its CEO had resigned and filed for bankruptcy.
The company owed as much as $500 million to at least 200 creditors when it filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas according to a filing.
In February, Compute North announced a $385 million capital raising, made up of a $85 million Series C stock round and $300 million in debt financing. However, it failed due to miners’ struggles to subsist in the face of falling bitcoin (BTC) prices, rising power prices, and record mining challenges.
The filing is anticipated to have detrimental effects on the industry. Compute North is one of the biggest data center providers for miners, and has multiple deals with other bigger mining companies. Drake Harvey, who has served as COO for the past year, has been named president of Compute North.
Compute North has four facilities in the United States: two in Texas, one in each of South Dakota and Nebraska, according to the company’s website. Marathon Digital (MARA), where Compute North has activated 40 megawatts (MW) of a 280MW wind-powered facility at its Upton County in West Texas, is one of the company’s partners.
Compass Mining, a provider of brokerage and hosting services for bitcoin mining, recently announced a 75MW hosting collaboration for its Granbury, Texas, data center with Compute North. Compass tweeted that it was studying the bankruptcy proceedings and that Compute North had told them not to expect any disruptions to mining activities as a result of the case.
Marathon also tweeted that it was in contact with Compute North and that the bankruptcy proceedings won’t have an impact on its present mining operations.
Compute North also struck arrangements with BitNile Holdings (NILE), Bit Digital (BTBT), Sphere 3D, Atlas Mining, a Singapore-based company, and The9, a Chinese cryptocurrency miner (ANY). BitNile’s stock fell by around 1% in after-hours trade, while Bit Digital slightly increased.