Bitcoin mine operator Poolin and two related companies have applied for Chapter 11 bankruptcy protection in New Jersey, United States. The company disclosed that the three subjects had filed a voluntary application on 22 July and that the case had been joined by the United States Federal Bankruptcy Court in New Jersey. Court documents show that Poolin declared a liability of between $100 million and $500 million and that the number of creditors is expected to be between 10,000 and 25,000.

The liability was significantly larger than the assets

According to court records, Poolin declared assets of approximately $1 million to $10 million, significantly lower than the liability range. At the same time, it is stated that the company is expected to allocate some to unsecured creditors.

Also subject to insolvency proceedings were Lonestar Taproot LLC and Lonestar Dream, Inc. The three companies continue to operate and dispose of their assets from their original management, and the process is being consolidated.

September into competitive bidding and auction windows

The company stated to the court that the purpose of the Chapter application was to preserve as much value as possible for creditors and other interested parties through an orderly sale of assets. On 17 August, the court approved the tendering procedure, covering almost all of the debtor's assets and allowing the appointment of the “leading bidder”.

  • The deadline for eligible bids is 8 September
  • In the event of competitive offers, the auction is tentatively scheduled for 10 September
  • A hearing on the sale of assets is scheduled for 18 September

The court also arranged for creditors to participate remotely in the Section 341 meeting on 28 August. The revised notice indicated that the deadline for filing general claims had not yet been finalized.

Linked mines are almost closed.

In his first-day statement, the head of the reorganization, Michael DuFrayne, stated that the relevant sales process would cover the assets of Poolin and two United States affiliates. It was mentioned that Lonestar Dream had substantially contracted its mine operations prior to its application for bankruptcy and had begun dismantling the equipment after it ceased providing services to the client Elektron Energy.

The company retained a small number of employees to care for the mines and equipment, to accompany the sale of assets and to deal with insolvency. Another associated company, Lonestar Taproot, holds mining-related equipment, electrical assets, buildings, improved facilities and transformer infrastructure.

Court documents also show that Lonestar Taproot cooperated with the relevant parties of the mining manufacturer Bit Continent between March 2022 and December 2023. It was stated that the Bit continent had invested approximately $34.4 million at the time and had recovered approximately $24.1 million at the time of its withdrawal, and that the project had suffered significant losses during the cooperation period.

Liquidity was exposed in 2022

Poolin's financial pressure is not new. The company suspended the PoolinWallet presentation in September 2022, when it gave reasons for its tight liquidity and the rising demand from users.

Subsequently, Poolin offered to issue six IOUs on a 1:1 scale, with BTC, ETH, USDT, LTC, ZEC and DOGE balances for the users, and stated that consideration was being given to reducing financial pressure by introducing new investments, debt-for-equity swaps and the sale of assets.

The bankruptcy application also reflects the fact that in 2026 the Bitcoin mining industry was still under operational pressure. Industry data show that after halving the value of the calculator continues to be low, that the balance of gains and losses for some of the old miners has been further reduced, and that the sale of bitcoin reserves to supplement the cash flow has accelerated during the quarter.