Bitcoin mining firm Rhodium Enterprises has filed for voluntary Chapter 11 bankruptcy in the US Bankruptcy Court for the Southern District of Texas, revealing liabilities of up to $100 million.
The filing was submitted on Saturday and specifically names six subsidiaries: Rhodium Encore, Jordan HPC, Rhodium JV, Rhodium 2.0, Rhodium 10MW, and Rhodium 30MW.
According to court documents, the company’s debts range between $50 million and $100 million, while its total assets are estimated between $100 million and $500 million.
The bankruptcy filing follows previous reports of financial distress within the Rhodium group. In July, Rhodium Enterprises, which owns Rhodium Encore and Rhodium 2.0, reportedly failed to repay $54 million in loans. In 2021, the company raised $78 million in loans for its subsidiaries. Despite two proposed debt restructuring plans, disagreements among stakeholders led to a default.
Filing for Chapter 11 bankruptcy will let Rhodium restructure its debts while keeping the business running, giving the company a chance to work out a new repayment plan with adjusted terms.
Rhodium is not the first Bitcoin mining company to seek bankruptcy protection. Core Scientific, another major player in the industry, filed for Chapter 11 in December 2022, citing falling cryptocurrency prices and rising energy costs. Core Scientific emerged from bankruptcy in early 2024.
Core Scientific’s journey through bankruptcy reflects the broader challenges faced by the crypto mining industry, particularly during the “crypto winter.” At the height of the crypto boom in 2021, when Bitcoin’s value soared above $67,000, Core Scientific was the largest publicly traded Bitcoin miner by computing power. However, the dramatic fall in Bitcoin’s price to around $16,000 by December 2022, when the company filed for Chapter 11, reflected the volatility of the market and the pressures on crypto miners.
Rhodium has also faced legal challenges from competitors. In 2023, Rio Platforms filed a lawsuit against Rhodium Enterprises, seeking to recover more than $26 million in unpaid fees related to the use of Rio’s Whinstone Bitcoin mining facilities.
The company’s financial struggles have been exacerbated by declining Bitcoin miner profits, especially following the Bitcoin halving event in April. The reduction in miner rewards, coupled with higher electricity prices, has further squeezed profit margins for miners.
Rhodium has appointed law firm Quinn Emanuel Urquhart & Sullivan as general bankruptcy counsel and Province as restructuring adviser as it navigates the bankruptcy process.
