- Poolin filed for Chapter 11 bankruptcy with approximately $173 million in debt while seeking to sell its remaining U.S. mining assets.
- Court filings reveal customer IOUs account for most liabilities, while a $52 million stalking horse bid establishes the asset auction floor.
- Poolin’s expansion into the United States failed after the 2022 crypto market collapse, leaving thousands of customers with frozen wallet balances.
Former Bitcoin mining giant Poolin has filed for Chapter 11 bankruptcy protection in the United States as it seeks to sell its remaining U.S. mining assets while addressing approximately $173.1 million in outstanding obligations. The filing covers the Singapore-based parent company and its U.S. subsidiaries, Lonestar Dream Inc. and Lonestar Taproot LLC.
According to court documents, the bankruptcy petition was submitted after Poolin’s Texas mining and hosting operations stopped operating on July 10. The company estimates it has between 10,001 and 25,000 creditors, while assets range from $1 million to $10 million and liabilities total between $100 million and $500 million.
Chief Restructuring Officer Michael DuFrayne disclosed that unsecured customer obligations account for most of the debt. Around $163.7 million consists of IOUs issued to Poolin Wallet users after withdrawals were suspended during the 2022 cryptocurrency market downturn. Approximately 11,700 retail customers held frozen balances exceeding $100 when the platform halted withdrawals.
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Poolin prepares $52 million sale of Texas mining assets
Poolin does not plan to reorganize its business through Chapter 11. Instead, it intends to sell all remaining U.S. mining assets substantially to maximize recoveries for creditors.
The company has signed asset purchase agreements with Thor CALAP LLC, which will serve as the stalking horse bidder. The proposed transaction values the assets at $52 million, including $15 million for the Pyote property and $37 million for the Tarbush site’s power rights and mining equipment. The offer establishes the minimum auction price, although competing bids may emerge before the court approves the sale. Additionally, either property could be sold separately if that produces a stronger outcome for creditors.
Poolin launched a three-month marketing process before selecting the bidder. During that period, advisers contacted more than 335 potential buyers, secured 28 nondisclosure agreements, and received seven letters of intent. Meanwhile, Lonestar Dream and Lonestar Taproot accumulated approximately $45.9 million in losses since their formation.
Crypto market collapse reshaped Poolin’s business
Poolin was founded in China in 2017 and rose to become one of the world’s largest Bitcoin mining pools by 2019. Besides mining services, the company expanded into digital asset lending through Poolin Wallet, offering cryptocurrency-backed USDT loans and interest-bearing deposit products.
China’s ban on Bitcoin mining in 2021 forced the company to expand its operations in the United States. However, Poolin had borrowed roughly $213 million against cryptocurrency assets valued at about $355.8 million. Consequently, the 2022 crypto market crash triggered collateral liquidations, leaving the company unable to meet debt obligations or restore customer withdrawals.
Conclusion
Poolin’s bankruptcy filing marks another significant restructuring within the cryptocurrency mining sector. The planned asset auction will determine how much value creditors recover while bringing one of the industry’s former market leaders closer to winding down its remaining U.S. operations.
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