Singapore-based Bitcoin mining company Poolin filed for Chapter 11 bankruptcy protection in New Jersey on July 22, alongside its US affiliates Lonestar Dream Inc. and Lonestar Taproot LLC. The company is also seeking court approval for a proposed $52 million sale of its Texas mining assets.

The filing comes nearly four years after Poolin froze customer withdrawals, leaving thousands of Poolin Wallet users with IOU tokens and turning the collapse of a mining business into a prolonged creditor dispute. Chapter 11 gives the company a court-supervised process to sell assets and address claims, rather than leaving creditors to pursue separate actions.

Poolin Lists About $173 Million in Prepetition Obligations

According to court records filed in the US Bankruptcy Court for the District of New Jersey, Poolin listed between 10,001 and 25,000 creditors. Its petition estimated assets at between $1 million and $10 million.

A declaration from Chief Restructuring Officer Michael DuFrayne put the company’s prepetition obligations at about $173.1 million. Of that amount, roughly $163.7 million was tied to unsecured IOUs issued to Poolin Wallet customers.

Poolin’s bankruptcy case is centered on selling its Texas assets rather than restarting or rebuilding its mining operations. Lonestar Dream stopped mining and hosting activities at its Pyote and Tarbush sites on July 10, according to the filing documents.

The company has entered into asset purchase agreements with Thor CALAP LLC for a combined $52 million stalking-horse bid. The proposal includes $15 million for the Pyote property, related power rights, and equipment, and $37 million for Tarbush power rights and equipment. The transaction remains subject to higher or otherwise better competing bids, as well as court approval. In bankruptcy sales, a stalking-horse bid can set a baseline price while allowing the estate to test whether other buyers will offer more favorable terms.

Poolin spent more than three months marketing the assets. The company contacted more than 335 potential buyers, including cryptocurrency miners and operators in artificial intelligence and high-performance computing. That process produced 28 confidentiality agreements, seven letters of intent, and three additional expressions of interest.

The company’s Texas expansion ran into difficulties after Poolin moved mining operations out of China following Beijing’s 2021 mining ban. Poolin expected to receive as much as 600 megawatts of power, but only 100 megawatts became available. As a result, the mining equipment purchased for the company’s US operations exceeded what was needed.

Some of that equipment was later sold, generating an $8.8 million loss from fiscal year 2023 through fiscal year 2025. Lonestar Dream and Lonestar Taproot ultimately accumulated about $45.9 million in losses.

Poolin Wallet Collapse Remains Central to Creditor Claims

Poolin’s financial problems extended beyond its mining operations. In June 2022, when Bitcoin fell below $20,000, Tether issued margin calls against collateral that Poolin had pledged through Poolin Wallet. Poolin then transferred almost all of that collateral to Antalpha and borrowed about $213 million against crypto assets valued at just under $356 million.

In September 2022, Poolin Wallet suspended withdrawals and issued approximately $163.7 million in IOU tokens to customers. According to the bankruptcy filing, about 11,700 wallet users held balances above $100.

Bitcoin later fell below $16,800 in November 2022. After that, Poolin ceased operations, and Antalpha liquidated the collateral. Management estimated that about $260 million was owed to Antalpha against digital assets valued near $265 million at the time.

Poolin was previously one of the world’s largest Bitcoin mining pools, accounting for roughly 14% of the Bitcoin network’s mining share in 2019. Its remaining value now depends on the Texas asset sale and the outcome of the Chapter 11 process.

The court-supervised auction will determine how much creditors may recover. Any distribution will depend on competing bids, sale expenses, administrative claims, and approval of the proposed liquidation plan.