A Bitcoin mining firm BCause is now subject to liquidation following court orders reported the Finance Magnets.
Previously on Wednesday, The Virginian Plot reported that BCause Mining LLC filed for bankruptcy (Chapter 11) during April of this year.
Following the bankruptcy, the federal court released an order allowing the liquidation of the company’s assets under Chapter 7.
Bitcoin mining firm BCause liquidates due to heavy debt?
It is estimated that creditors stand in line to receive over thirteen million dollars ($13m) from the company. The list includes United States Customs and Border Protection, the landlord, as well as company executives. There are twenty-three creditors in total.
In January 2018, the company received a total of five hundred thousand dollars ($500,000) to broaden its operation to warehouses. The received the amount from the Virginia Beach district, planning on becoming the largest crypto-mining company in the North American continent. In return for their grant, they promised to invest $64.8 million (nearly sixty-five million dollars) to expand the business.
However, their file for bankruptcy was made in response to a lost lawsuit against WESCO Distribution (one of their vendors), owing them a total of nearly two million dollars ($2M).
Simultaneously, an unpaid bill of over one and a half million dollars ($1.7M) led to a settlement with their electricity supplier, Dominion Energy. Alongside this, nearly seven million dollars ($7M) of unpaid dues are also being claimed by BMG Operations, which organized operational equipment for the firm.
The company also sought to pay back creditors by trying to initiate a venture acting as a medium of exchange for digital assets. However, the company needed to raise more capital for this idea, and therefore the plan was crushed.
If the company went into liquidation, the amount gathered would have been a little over two million ($2.12 million), according to estimates, resulting in losses for the creditors. The mining industry is booming at the moment, however, this is an expected fear of missing out before the next Bitcoin halving event.