Argo Blockchain, a company that mines cryptocurrencies, made public its intentions to file for bankruptcy earlier than expected on December 12 due to an administrative error.
Will Foxley, the Content Director at Compass Mining, was the one who first posted a screenshot of the special announcement made by Argo Blockchain on December 9.
Included in the paper with the heading “Special Information for Stakeholders” was an Argo Special Announcement, which revealed that the cryptocurrency mining firm would voluntarily file a petition for protection under Chapter 11 of the United States Bankruptcy Code just two days from now.
Foxley continued by saying that it makes him sorry to watch so many bright teams being washed out by the harsh economics of mining, but at the same time, he wished all those who were weathering the storm the best of success.
What has been going on with Argo Blockchain
On Friday, December 9, trading in the shares of Argo Blockchain (ARBK), which is located in London, was halted in both the United Kingdom and the United States. The specific reason for the suspension was not made public, although in most cases, it is because an important announcement is about to be made.
According to a statement that the company issued to the London Stock Exchange at the time, in the event that Argo is unable to secure any additional financing, the company will soon experience a negative cash flow and will be forced to either scale back its operations or cease doing business entirely.
Argo announced at the end of October that a proposal to raise $27 million from a strategic investor had failed to fall through, which resulted in the company’s share price plummeting by more than 70 percent.
A portion of Argo’s bitcoin assets were utilized, in August, to satisfy bitcoin-backed debt obligations owed to Galaxy Digital. This was done before the unsuccessful funding attempt in October.
When compared to the 204 bitcoin or bitcoin equivalents that were mined in October, the blockchain technology business located in London mined 198 bitcoin or bitcoin equivalents in November.
This was mostly as a result of an increase in the difficulty of using the Bitcoin network. The overall hashrate of the business remains unchanged at 2.5 exahashes per second. Mining profit for the month of November came in at 29%, down from 32% in October.
Argo and many other publicly listed bitcoin miners have been experiencing difficulties as of late due to the combination of declining cryptocurrency prices and increasing expenses of electricity.
Bitcoin miners are experiencing financial difficulties, which is dimming the shine of the digital gold rush in the state of Texas. As a result, Bitcoin miners are leaving behind what some fear will be a wasteland of incomplete sites and abandoned equipment.
To achieve its goal of becoming a haven for cryptocurrency mining, the state of Texas has aggressively courted miners by offering cheap power and favorable regulations. As a result, many miners have taken out loans totaling billions of dollars in order to purchase expensive machines and build infrastructure.