Prominent Bitcoin (BTC) mining company Core Scientific has revealed in a court file that you are looking at bankruptcy as a possible solution as it is unlikely that you will not be able to pay off your debts any time soon due to a lack of cash flow.

Consequently, the bitcoin miner’s share price fell sharply in the hours after this disclosure.

At the time of writing, the company’s stock fell from $1.01, where it delisted earlier this week, to $0.22, a sharp drop of more than 78%.

In accordance with the Board’s decision, the company will not make payments due in late October and early November 2022 for a number of its assets and other financing transactions, along with its two bridge notes.

The court filing with the United States Securities and Exchange Commission (SEC) asserted that due to this outcome, creditors under these lines of credit may exercise remedial action after any applicable grace period, such as choose to accelerate the principal amount of said debt, sue the Company for non-payment, or seek to take action on the guarantee, when appropriate.

Basic scientific set to declare bankruptcy

After the financial crisis, the company is evaluating the available measures with the help of some legal experts, in addition to implementing strategic advice, entering into liability management transactions, raising additional funds or even changing its current capital structure.

In particular, the company’s last option, specifically to protect itself from creditor litigation, is to file for bankruptcy if these alternative measures fail. Remember that this year, a large number of companies went bankrupt in the cryptocurrency space as a result of the bear market.

For example, the Thai Security and Exchange Commission banned cryptocurrency lender services after Zipmex filed for bankruptcy back in September. Additionally, major crypto lender Celsius filed for bankruptcy in July.

Core Scientific found itself in this situation as a result of the continuing market decline, among other factors that have lowered the estimated value of bitcoin, and in addition to its legal actions against the insolvent Celsius Network.

Before this, Core Scientific had already been producing a lot of BTC during the year. With nothing more than an average price of around $23,000 per Bitcoin sold in June, resulting in the company selling 7,202 units.

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