Bondholders of Troubled Bitcoin Miner Core Scientific Said to Be Working With Lawyers: Report

A group of convertible bond holders of Core Scientific (CORZ), the largest bitcoin miner by computing power, is in talks with restructuring attorneys at Paul Hastings, reported Bloomberg Law, citing people with knowledge of the situation.

Core said last week it was exploring strategic alternatives for raising capital, and warned that bankruptcy could be an option. The company also said it hired Weil, Gotshal & Manges LLP as legal advisers and PJT Partners LP as financial advisers.

The Bloomberg report Tuesday didn’t specify which convertible bondholders have retained the lawyers, and said neither Core nor Paul Hastings had returned calls for comment.

Core Scientific’s woes reflect the depressed state of the bitcoin mining industry, with firms facing the squeeze of a bitcoin bear market and higher energy costs. Most recently, bitcoin miner Argo Blockchain (ARBK), said a deal to raise 24 million British pounds (US$27 million) from a strategic investor had fallen through, sending that company’s shares tumbling. Just prior to that, mining data center operator Compute North, filed for bankruptcy, owing as much as $500 million to at least 200 creditors.

Read more: Crypto Miners Face Margin Calls, Defaults as Debt Comes Due in Bear Market