Publicly traded crypto miner Core Scientific filed for Chapter 11 bankruptcy protection on Dec. 21 at the Southern District of Texas bankruptcy court.

According to court documents, the miner has liabilities between $1 billion- $10 billion. It has over 1,000 creditors, with the largest unsecured claim owed to B. Riley Financial –the bankrupt firm owes the investment bank $42.36 million.

Its other creditors included Dalton Utilities, Shell Energy, US Customs and Border Patrol, Kentucky Department of Revenue, etc.

On Dec. 20, CNBC reported that Core Scientific was still generating a positive cash flow. However, the funds are not enough to finance the debts owed on its mining equipment.

Meanwhile, the company would continue to operate while negotiating a deal with senior security holders that hold most of its debt.

Core Scientific was one of the crypto miners that went public in 2021 during the SPAC boom. At its peak, the firm had a valuation of $4.3 billion, which has since fallen to $78 million and has seen a 98% drop in its stock value on the year-to-date metric.

The miner had hinted at the possibility of a bankruptcy filing in October. At the time, it warned that holders of its common stock might experience a total loss of their investment if the industry does not recover. At the time, Core Scientific said:

“Operating performance and liquidity have been severely impacted by the prolonged decrease in the price of bitcoin, the increase in electricity costs.”

Another issue for Core Scientific is Celsius which was its customer. Celsius’s bankruptcy affected the miner’s balance sheet and might have worsened its liquidity problems.

Despite the bankruptcy filing, Yahoo Finance data showed that Core Scientific stocks grew by 3% at the close of the trading hours on Dec. 20.

Reports revealed that Core Scientific’s stock soared by almost 200% earlier in the month after receiving a financing proposal from a creditor.

Core Scientific joins the growing list of capitulated crypto miners during the current bear market. In September, Compute North filed for bankruptcy.

On Dec. 20, another miner Greenidge Generation entered into a non-binding debt restructuring agreement with NYDIG. An SEC filing also revealed that Greenidge’s board of directors was considering the possibility of a voluntary bankruptcy filing.

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