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

The filing comes nearly four years after Poolin froze customer withdrawals, leaving thousands of Poolin Wallet users holding IOU tokens and turning the collapse of its mining and wallet operations into a prolonged creditor dispute.

Poolin Lists About $173 Million in Prepetition Obligations

Court records filed in the U.S. Bankruptcy Court for the District of New Jersey show that Poolin reported between 10,001 and 25,000 creditors. Its petition estimated assets of between $1 million and $10 million.

In a declaration, Chief Restructuring Officer Michael DuFrayne said Poolin had about $173.1 million in prepetition obligations. Roughly $163.7 million of that amount was tied to unsecured IOUs issued to Poolin Wallet customers.

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

Poolin has signed asset purchase agreements with Thor CALAP LLC for a combined $52 million stalking-horse bid. The offer consists of $15 million for the Pyote property, related power rights and equipment, and $37 million for Tarbush power rights and equipment. In Chapter 11 sales, a stalking-horse bid typically sets a baseline price for an auction while allowing other qualified buyers to submit higher or better offers. The transaction remains subject to competing bids and approval by the bankruptcy court.

The company said it marketed the assets for more than three months, contacting more than 335 potential buyers. Those parties included cryptocurrency miners as well as artificial intelligence and high-performance computing operators. The sale process produced 28 confidentiality agreements, seven letters of intent and three additional expressions of interest.

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

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 Claims Remain Central to the Bankruptcy

Poolin’s financial problems extended beyond its mining business. In June 2022, when Bitcoin fell below $20,000, the decline triggered margin calls from Tether against collateral the company had pledged through Poolin Wallet. Poolin then transferred nearly 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 worth of IOU tokens to customers. According to the filing, about 11,700 wallet users had balances of more than $100.

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

Poolin was previously one of the world’s largest Bitcoin mining pools, reaching about 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, which will determine how the proceeds are handled among creditor groups.

A court-supervised auction will determine the value available to creditors. Any distribution will depend on competing bids, sale expenses, administrative claims and approval of the proposed liquidation plan.