Poolin, a major Bitcoin mining firm, has filed for Chapter 11 bankruptcy protection in the U.S., initiating a court-controlled sale of its Texas mining facilities. The Singapore-based company and its U.S. subsidiaries, Lonestar Dream Inc. and Lonestar Taproot LLC, submitted voluntary petitions on July 22 in the District of New Jersey Bankruptcy Court.

The filing reveals Poolin’s obligations totaled about $173 million before bankruptcy, with nearly $164 million stemming from unsecured IOUs issued to Poolin Wallet customers after withdrawals were halted in 2022 amid the crypto market slump. Assets are estimated between $1 million and $10 million, while liabilities range from $100 million to $500 million. The company identified between 10,001 and 25,000 creditors.

Mining and hosting operations at the Texas facilities in Pyote and Tarbush ceased on July 10, leaving only a minimal staff to maintain security and manage the asset sale. Poolin’s Chief Restructuring Officer, Michael DuFrayne, mentioned that the bankruptcy aims to liquidate remaining assets rather than restart mining activities.

Texas Assets Up for Auction

Poolin has arranged a combined stalking-horse bid of $52 million through Thor CALAP LLC for its Texas mining properties, setting the minimum price for the upcoming auction under Section 363 of the U.S. Bankruptcy Code. The proposal includes $15 million for the Pyote site, along with power rights and equipment, and $37 million for the Tarbush location’s power rights and equipment. the Tarbush deal excludes the property’s surface-use agreement.

These agreements allow higher competing offers before the court approves any sale, and each site may be auctioned separately if separate bids yield better creditor value. The debtors reported engaging over 335 potential buyers and investors, including cryptocurrency miners and AI infrastructure companies, to market the assets over approximately three months. This interest reflects a broader trend of miners repurposing data centers beyond bitcoin mining.

Market players have been watching closely, with some seeing the sale as a barometer of the broader mining industry's health, especially given the ongoing pressures in the crypto space.

Cryptos have been under pressure, as seen in the recent market volatility triggered by tech sector earnings and other economic factors.