Poolin has filed for Chapter 11 bankruptcy protection in the United States as it seeks to sell its Texas bitcoin mining assets through a court-supervised process while carrying about $173 million in prepetition obligations.

The bankruptcy case covers Singapore-based Poolin and its U.S. subsidiaries, Lonestar Dream Inc. and Lonestar Taproot LLC. According to filings in the U.S. Bankruptcy Court for the District of New Jersey, the entities filed voluntary Chapter 11 petitions on July 22. The debtors said the proceedings are designed to support an orderly sale of their remaining assets, rather than to restart the business as an operating mining company.

Court records show that Poolin estimated it has between 10,001 and 25,000 creditors, assets valued between $1 million and $10 million, and liabilities ranging from $100 million to $500 million.

A declaration filed by Chief Restructuring Officer Michael DuFrayne said the companies owed approximately $173.1 million before entering bankruptcy. About $163.7 million of that amount relates to unsecured IOUs issued to Poolin Wallet customers after withdrawals were suspended during the cryptocurrency market downturn in 2022.

Mining and hosting operations at Poolin’s Pyote and Tarbush facilities in West Texas ended on July 10, according to the declaration. Only a small workforce remains in place to secure the sites and assist with the sale process.

Texas assets head to auction

The debtors have already signed separate asset purchase agreements with Thor CALAP LLC, setting a combined stalking-horse bid of $52 million for the Texas assets.

The agreements include a $15 million offer for the Pyote property, along with its related power rights and equipment. A separate $37 million bid covers the Tarbush site’s power rights and equipment. Court filings state that the Tarbush transaction does not include the property’s surface-use agreement.

Under Section 363 of the U.S. Bankruptcy Code, stalking-horse agreements establish a floor price for an auction while allowing higher competing bids before any final sale is approved by the court. The process is commonly used in Chapter 11 cases to test asset values in the market while keeping the sale subject to bankruptcy-court oversight. Each mining site may also be sold separately if individual bids deliver better value for creditors.

Before entering the proposed transactions, the debtors spent about three months marketing the assets to more than 335 prospective buyers and investors. The outreach targeted cryptocurrency miners, artificial intelligence and high-performance computing operators, hyperscale data center companies, private equity firms and real estate investment trusts, according to the court declaration.

That marketing process produced 28 signed nondisclosure agreements and seven letters of intent covering both individual facilities and the combined portfolio.

Court filings state that interest from AI infrastructure operators increased the potential value of the sites because of their existing electrical systems and power capacity, even though Poolin’s own mining and hosting business had become unprofitable. Since their formation, Lonestar Dream and Lonestar Taproot accumulated losses of approximately $45.9 million.

Wallet collapse left customers with IOUs

Poolin was founded in China in 2017 by Zhibiao “Kevin” Pan, Fa Zhu and Tianzhao Li. The company grew into one of the world’s largest bitcoin mining pools and held the top global position by September 2019.

In addition to mining, Poolin expanded into financial services through Poolin Wallet. The wallet business allowed customers to borrow USDT against cryptocurrency collateral and later introduced interest-bearing deposit products.

The business model came under pressure after China prohibited bitcoin mining in 2021 and digital asset prices fell sharply the following year.

According to the Chapter 11 declaration, Poolin transferred customer collateral to Antalpha Technologies and borrowed roughly $213 million against cryptocurrency valued at approximately $355.8 million at the time.

The filing states that those borrowed funds were used to support construction of the Texas mining facilities, purchases of mining machines, customer withdrawals, interest payments and day-to-day operating expenses.

As cryptocurrency prices continued to decline, Poolin Wallet suspended withdrawals in September 2022 and distributed IOU tokens representing customers’ frozen balances.

Approximately 11,700 wallet users held balances exceeding $100 when about $163.7 million worth of IOUs were issued, according to the declaration. Those IOUs are central to the bankruptcy because the filing identifies them as unsecured obligations, meaning recoveries depend on the value left after approved sale costs, administrative expenses and other claims are addressed through the court process.

The court filing also states that Antalpha liquidated Poolin’s collateral in November 2022, when management estimated the company owed about $260 million against digital assets then valued at roughly $265 million.

Poolin has not resumed normal business operations since then. Its remaining assets now include approximately $1.2 million held in a New Jersey bank account, an office lease and an intercompany claim. Certain Poolin Wallet users have also filed legal claims against the debtors in both the United States and Singapore.

Mining infrastructure draws AI-related interest

Although the bankruptcy case is focused on creditor recoveries, the sale process also reflects how mining infrastructure has become valuable to buyers outside the cryptocurrency sector.

According to the Chapter 11 declaration, many parties contacted during the marketing process were focused on artificial intelligence and high-performance computing rather than bitcoin mining alone. Existing power connections and electrical infrastructure have become increasingly attractive for AI data center projects.

Poolin’s bankruptcy follows another insolvency case involving a major mining operator. Earlier this year, Russian miner BitRiver faced court-supervised bankruptcy over unpaid debts tied to power supply, data center operations and service contracts.

The interest in Poolin’s Texas facilities is consistent with a broader pattern among publicly listed mining companies. Earlier this week, Ionic Digital secured SEC approval for its planned Nasdaq listing after repositioning much of its business toward AI infrastructure. Ionic Digital, which was created from Celsius Network’s bankruptcy restructuring, has converted part of its Texas campus from bitcoin mining to AI computing under a long-term agreement with AI cloud provider Nscale.

IREN has adopted a similar strategy. In June, the company acquired Spain’s Nostrum Group to add approximately 490 megawatts of grid-connected power for AI cloud expansion across Europe. IREN has reported rising AI cloud revenue even as bitcoin mining income declined. HIVE Digital and Bitdeer have also announced projects to convert mining facilities into high-performance computing infrastructure.

Poolin’s case differs from those companies because it is liquidating assets through Chapter 11 rather than expanding into AI operations itself. Even so, court filings indicate that demand from AI-focused buyers has increased interest in the Texas properties during the auction process.

The debtors said unsecured creditors, including Poolin Wallet customers, could receive distributions if the auction results in successful sales. According to the Chapter 11 filings, final recoveries will depend on competing bids, administrative expenses, sale costs and court approval of a liquidation plan.