Despite the effort, Greenidge warned he was still at risk of bankruptcy. As part of the deal, it will change its business model from self-mining to hosting.
Bitcoin Miner Greenidge Reaches Deal With NYDIG
He will sell his mining machines to pay off debts of nearly $75 million
He is among the struggling cryptominers
Greenidge is still threatened with bankruptcy
On the brink of extinction, cryptocurrency miner Greenidge Generation has reached an agreement to restructure $74.4 million in debt with its lender, NYDIG.
The deal involves Greenidge selling most of its bitcoin mining equipment to NYDIG in a bid to pay off the multi-million dollar debt. The two parties signed a non-binding agreement, according to documents filed with the United States Securities and Exchange Commission (SEC), cited by various media.
The company will forego 2.8 emissions per second (EH/s) from mining machines, keeping around 1.2 EH/s for self-mining. The deal means Greenidge will shift its business model from self-operated to a hosting provider, The Block reported. The company will also transfer other assets, including infrastructure and capital from its subsidiaries.
Despite these efforts, mining remains threatened with bankruptcy. In the filing, Greenidge said the loss of cash was unsustainable and that the company’s board was engaged “in active discussions about the potential and timing of a voluntary bankruptcy filing,” CoinDesk reportedly said.
If the deal with NYDIG is terminated, the company still needs $20 million in new funds through 2023 to avoid bankruptcy, the media added.
Bitcoin miners in trouble
Greenidge is one of the cryptocurrency miners that has struggled with liquidity this year amid falling prices in the crypto market and rising electricity costs.
As Bitcoin fell below $30,000 and even below $20,000 in recent months, many industry players suffered losses. Major cryptominers have been forced to sell more bitcoin than they mine to pay off debt, get liquidity, and keep operations afloat.
The world’s largest Bitcoin miner, Core Scientific, warned in October that it was running out of money and could go bankrupt by 2023. A month earlier, another major Bitcoin miner, Compute North, had filed for bankruptcy with debts of up to $500 million. to at least 200 creditors.