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Bitcoin Miner Greenidge on the Verge of Bankruptcy

Greenidge doubts the viability of the continued operation, following the footsteps of rival crypto miner Core Scientific. The Bitcoin mining firm acknowledged its dwindling capacity to sustain mining activity. Greenidge’s update revealed its board of directors actively considered placing the BTC miner in voluntary bankruptcy. 

Greenidge Financial Struggles Evident

The statement noted that its financial health is uncertain, making its going concern doubtful. The company approximated its cash burn rate to $8 million monthly in October and November. The statement confessed to allocating $5.5 million towards settling interests and principal obligations it owes NYDIG. 

The statement detailed that Greenidge renegotiated its obligations. In particular, it swapped a substantial amount of its $ 74 million debt owed to NYDIG with assets valued at $57M to 68M.

Renegotiating the repayment terms with its principal lender NYDIG involved ceding a significant amount of its mining-related equipment and supporting infrastructure. NYDIG is set to take over assets whose mining capacity is approximately 2.8EH/s.

NYDIG offers financial services to crypto firms with specialty funding to BTC miners. Transferring the mining-related assets leaves Greenidge operating miners predominantly owned by its lender NYDIG rather than running its own. 

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The company ruled out speculations of ceding all mining infrastructure. Instead, it clarified retaining ownership with a mining infrastructure of 1.2EH/s capacity. 

Besides negotiating with lenders, Greenidge committed to actively pursuing alternatives for securing additional equity capital. 

Overview of BTC Mining

An overview of BTC mining shows 2022 strangled the majority of companies. Greenidge decried the low bitcoin prices as forcing miners to fund operations and new infrastructure acquisitions with borrowed funds. The trend has plunged many miners trapped in financial distress. 

Greenidge’s situation mirrors the financial distress portrayed by rival BTC miner Core Scientific. The rival has suffered a downtrend in its stock price that today exchanges 90% below the previous year’s level. 

Core Scientific is navigating the liquidity crisis by renegotiating with lenders. Recently, it announced receiving a $72M offer from its primary lender B. Riley. The financial firm offered to inject $40M unconditionally. In addition, it committed to adding $32M provided Core Scientific halts payments to equipment lenders.

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Editorial credit: Godlikeart/ Shutterstock.com


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Stephen Causby

Stephen Causby is an experienced crypto journalist who writes for Tokenhell. He is passionate for coverage in crypto news, blockchain, DeFi, and NFT.

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