Bitcoin mining firm Poolin has filed for Chapter 11 bankruptcy protection alongside its U.S. affiliates as it moves to auction two mining sites located in West Texas.

The company has secured a $52 million opening bid from Thor CALAP LLC and intends to use the proceeds from the sale to repay creditors. Among those creditors are approximately 11,700 wallet customers who are collectively owed $163.7 million. The roughly $112 million gap between the stalking-horse bid and total wallet customer claims underscores the uncertainty surrounding recovery prospects for affected users.

Poolin was once ranked as the world's largest Bitcoin mining pool by hashrate. The firm's decline followed a series of major industry disruptions, including China's sweeping crackdown on cryptocurrency mining in 2021, which forced many mining operations to relocate overseas. Poolin itself suspended withdrawals from its wallet service in September 2022, citing liquidity issues — a move that preceded the current bankruptcy proceedings. Subsequent headwinds, including the prolonged crypto market downturn throughout 2022 and steadily rising energy costs, further eroded the company's financial position.

Chapter 11 of the U.S. Bankruptcy Code allows a business to continue operating while it restructures its debts and works toward a court-supervised repayment plan. In Poolin's case, the bankruptcy proceedings are centered on the proposed auction of its Texas-based mining facilities, with the stalking-horse bid from Thor CALAP LLC setting the floor price for potential competing offers. Texas emerged as a major destination for Bitcoin mining operations after the China exodus, attracted by deregulated power markets and abundant energy infrastructure.

The case highlights the broader financial strain that has persisted across the cryptocurrency mining sector since the industry's peak, as firms grapple with compressed margins, debt obligations, and the challenge of serving retail and institutional customers amid ongoing market volatility. The April 2024 Bitcoin halving, which reduced block rewards from 6.25 to 3.125 BTC, has added further pressure on mining economics, placing additional scrutiny on firms with legacy costs and limited operating efficiency.

Source: CoinPedia