Poolin, once among the top Bitcoin mining pools, has filed for Chapter 11 bankruptcy in the US, including its Singapore-based parent and its American subsidiaries Lonestar Dream Inc. and Lonestar Taproot LLC.
Instead of restructuring to continue operations, the companies plan a court-supervised liquidation focusing on their Texas mining infrastructure. This move stems from financial troubles that began during the crypto bear market in 2022.
Debt and Financial Struggles
According to official filings, Poolin's assets are valued between $1 million and $10 million, while liabilities range from $100 million to $500 million. The Chief Restructuring Officer Michael DuFrayne reported obligations totaling around $173.1 million prior to bankruptcy, with nearly $163.7 million as unsecured debt owed to Poolin Wallet users whose funds were frozen during a 2022 withdrawal suspension.
Poolin’s main financial distress traces back to its wallet services rather than mining operations. The company offered users the ability to deposit cryptocurrencies, borrow USDT collateralized by assets, and earn yields during the crypto boom. But the 2022 market crash forced withdrawal freezes and left about 11,700 customers holding IOU tokens instead of accessible funds.
Adding to the woes, Poolin borrowed $213 million from Antalpha Technologies using crypto assets as collateral. When Antalpha liquidated this collateral amid falling prices, Poolin faced heavy losses. Concurrently, its expansion of mining operations in the US failed to generate expected returns.
Operating losses by the US subsidiaries reached approximately $45.9 million. This led to shutting down Texas mining and hosting sites on July 10. Despite these setbacks, Poolin marketed its mining assets to over 335 potential buyers, securing 28 non-disclosure agreements and seven letters of intent, though a previous $49 million sale attempt to China Green Agriculture fell through.
Currently, Poolin’s bankruptcy process aims to sell the remaining assets and distribute proceeds to creditors. However, Poolin Wallet users should not expect to recover the full amount owed, as recoveries depend heavily on auction outcomes.
