Marathon Digital Holdings Inc., revealed on Thursday that it has more than $80 million of exposure to crypto mining data center company Compute North Holdings Inc, which filed for bankruptcy in the US Bankruptcy Court for the District South Texas last month.

According to an official statement, Marathon has about $10 million invested in Compute North convertible preferred stock and $21.3 million related to a senior unsecured note with the company.

Marathon, which had struck a deal to use Compute North’s data centers to park its computers for mining purposes, said it also paid the company about $50 million in operating deposits. Those deposits were primarily related to security and prepaid deposits associated with the operation of Compute North’s King Mountain and Wolf Hollow mining facilities in Texas, Marathon said.

Marathon also installed 40,000 mining equipment in Compute North Wind Power’s McCamey, Texas, according to the company’s second-quarter earnings. Marathon said it began expanding its hosting deals with Compute North during the second quarter of this year.

Last month, Compute North became the latest victim of the bear market when it filed for Chapter 11 bankruptcy in US court. In its bankruptcy filing, the miner blamed supply problems, problems with its biggest lender, this year’s bear market, the rising cost of electricity in the US, and the amount of time between building its new data center, and it’s becoming profitable.

Marathon is one of Compute North’s largest customers, putting their heavy-duty computers, known as miners, into Compute North’s data centers for a fee to mine Bitcoin.

The biggest blow to hit Compute North came from a loan the company took out from Generate Lending LLC, a California-based specialty finance company.

In February 2022, Generate offered a $300 million loan to Compute North to finance upcoming projects in Texas and Nebraska. While the miner was able to repay some of the funds, around a third is still pending.

As part of its efforts to recover its money, Generate took over some of Compute North’s assets, including two of the sites where its capital was funneled into construction. Generate also stopped funding the other sites Compute North was building, which the miner hoped would generate enough profit to pay off the lender’s loan.

Compute North currently owes around $500 million to Generate Lending LLC. and 200 other creditors. The company’s bankruptcy filing is the latest indication of the difficulties Bitcoin miners are facing, brought on by the ongoing bear market.

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