Photo: Giga Watt Mining / Twitter
During the recent bitcoin market downturn, who suffered most were miners. With the current market prices, even the most efficient Bitcoin mining hardware is unprofitable. This lead to a number of cryptocurrency firms going bust. Another company hanging out the white flag is Giga Watt, one of North America’s largest cryptocurrency miners and one of the earliest players in bitcoin boom.
The mining firm, has recently declared bankruptcy after filing for a Chapter 11 bankruptcy at the Easter District of Washington. According to the reports, the firm owes $7 million and declares itself unable to repay unsecured investors, naming hundreds of creditors in its filing. Among the list of creditors can be named Douglas County, which claims over $310,000 USD from the company, and the electric provider Neppel Electric, which is almost to lose half a million dollars.
Giga Watt had between $10 and $50 million in liabilities, with assets within the range of only $50,000, according to court documents. The firm has filed for bankruptcy protection, meaning it is likely to liquidate all assets in its bid to repay secured creditors.
According to the minutes of a special meeting of the shareholders of Giga Watt, which was held on November 18:
“The corporation is insolvent and unable to pay its debts when due. The corporation and its creditors would best be served by reorganization of the corporation under Chapter 11 of the Bankruptcy Code.”
The meeting was called by Andrey Kuzenny, a director owning more than 10 percent of the mining firm.
The recently declared bankruptcy follows the August departure of GigaWatt co-founder David Carlson. Carlson, a former Microsoft engineer who began mining bitcoin as a hobby in 2012, was among the first miners to tap the cheap hydropower of Central Washington. In 2013, Carlson built what was then the world’s largest bitcoin mine, in an old furniture store in downtown Wenatchee, and later expanded into hosting services for other miners.
A few years later, Carlson, who planned to open up the industry to smaller scale miners, initiated the foundation of Giga Watt. He was driven by the idea to allow the creation of customized mining “pods” along with the certainty of a stable and cheap electrical supply grid.
In May 2017 he launched an initial coin offering (ICO) aiming to attract investors to the company’s services. During the public sale, he managed to raise $22 million-worth of cryptocurrency at the time. This January, a group of plaintiffs sued Giga Watt for allegedly conducting an unregistered securities offering, accusing the firm of failing construction deadlines and missing promises.
Despite all the challenges, last month it decided to follow a new strategy aimed to attract remote customers and to improve the company’s performance, presenting the world its Giga Pods for B2B customers.
As for the latest Giga Watt’s bankruptcy news, the company is not the first and only big fish on crypto market to fall out of the race.
