Poulin, once the world’s largest Bitcoin mining pool, has filed for Chapter 11 bankruptcy, citing financial difficulties. The filing, filed by the company and two of its subsidiaries in New Jersey District Court, reveals that long-standing financial problems have reached a new level since the 2022 liquidity crisis.
According to documents filed in court, Poulin’s total debt is approximately $173.1 million. Of this, $163.7 million consists of Invoices of Obligation (IOU) issued to Poulin Wallet users after withdrawals were suspended in 2022. At the time, these users did not have access to their wallet assets, and the company issued debt instruments representing the receivables.
As part of the bankruptcy process, Poulin plans to sell two Bitcoin mining facilities in West Texas. Initial bids for the facilities totaled $52 million, according to court documents. Repayment to creditors will depend on the proceeds of the sale and final court approval.
Founded in 2017, Poolin has grown significantly, especially amidst the rapid expansion of Bitcoin mining, reaching the status of the world’s largest Bitcoin mining pool in 2019. The company has become one of the most influential players in the space, controlling a significant portion of the total transaction verification power on the global Bitcoin network.
However, the sharp decline in the cryptocurrency market in 2022, decreased mining revenue, and liquidity issues also negatively affected Poulin. In the same year, the company suspended withdrawals for users, a decision that caused great concern among investors.
Industry experts say the Chapter 11 process gives Poulin an opportunity to reorganize without completely shutting down operations. However, how much creditors receive will depend on the proceeds from the sale of the mining facility and the court-approved reorganization plan.
Analysts say this development once again highlights the importance of financial sustainability in the crypto mining sector, with rapid fluctuations in market conditions potentially putting even large companies under significant financial pressure.
*This is not investment advice.
