Bitcoin mining pool Poolin has disclosed that it has filed for Chapter 11 bankruptcy protection in the United States and is selling its Texas Bitcoin mining assets through court-supervised proceedings. The focus of this filing is not on resuming mining operations, but rather on disposing of remaining assets and recovering funds from creditors.
Court documents show that Poolin and its U.S. subsidiaries, Lonestar Dream Inc. and Lonestar Taproot LLC, voluntarily filed for bankruptcy in the U.S. Bankruptcy Court for the Southern District of New Jersey on July 22. The company estimates that the entities have between 10,000 and 25,000 creditors, assets between $1 million and $10 million, and liabilities between $100 million and $500 million.
The company had approximately $173 million in debt before bankruptcy.
The company disclosed that its total debt before bankruptcy was approximately $173.1 million. Of this, approximately $163.7 million came from unsecured IOUs issued to users after the wallet suspended withdrawals in 2022.
According to a statement submitted by Michael DuFrayne, the head of the restructuring, Poolin froze some of its wallet operations during the market downturn in 2022, recording users' frozen balances in the form of IOUs. At that time, approximately 11,700 wallet users had account balances exceeding $100, involving approximately $163.7 million.
Founded in China in 2017, Poolin was once one of the world's largest Bitcoin mining pools, rising to number one in September 2019. In addition to its mining pool business, the company also provides financial services through Poolin Wallet, allowing users to borrow USDT using crypto assets as collateral, and later launched yield-bearing deposit products.
The Texas mine has ceased operations.
Documents show that Poolin's mining and hosting operations in Pyote and Tarbush, West Texas, ceased on July 10. Only a small number of employees remain to handle site security and facilitate the asset sale.
The debtor has signed two asset purchase agreements with Thor CALAP LLC, setting up a "bid-from-the-bottom" scheme for the Texas assets totaling $52 million. Under Section 363 of the U.S. Bankruptcy Code, such arrangements set a minimum auction price before allowing other bidders to submit higher offers; the final transaction still requires court approval.
Prior to finalizing the deal, the company spent approximately three months pitching the assets to over 335 potential buyers and investors. These contacts included not only cryptocurrency mining companies, but also AI infrastructure operators, high-performance computing firms, hyperscale data center companies, private equity firms, and real estate investment trusts.
AI buyers boost the attractiveness of mining farms
Court documents state that existing power access and distribution systems enhanced the attractiveness of these mines to AI data center projects. During the marketing process, 28 entities signed confidentiality agreements, and seven additional letters of intent covered individual sites or the entire asset package.
Poolin itself did not shift towards AI operations, but instead chose to sell its assets directly during bankruptcy proceedings. However, this case once again demonstrates that mining infrastructure is being increasingly repriced by non-crypto buyers, especially sites with readily available power capacity.
The collapse of the wallet business dragged down the company.
The company disclosed that Poolin transferred customer collateral to Antalpha Technologies and borrowed approximately $213 million using approximately $355.8 million in crypto assets at the time as collateral. The loans were used to build a mining farm in Texas, purchase mining equipment, process customer withdrawals, pay interest, and cover daily operations.
As cryptocurrency prices continued to fall, Poolin Wallet suspended withdrawals in September 2022. By November 2022, Antalpha had liquidated the associated collateral. Management at the time estimated the company's liabilities at approximately $260 million, while the corresponding digital assets were valued at approximately $265 million.
Poolin has not resumed normal operations since then. Its remaining assets include approximately $1.2 million in a New Jersey bank account, an office lease, and a claim against an affiliated company. Some Poolin Wallet users have also filed legal claims against the relevant debtors in the United States and Singapore.
Additional information:Court documents state that whether unsecured creditors, including Poolin Wallet users, will receive a distribution will depend on the auction price, administration fees, sale costs, and subsequent liquidation arrangements.
