Former mining giant Poolin files for bankruptcy

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Poolin files for bankruptcy

The company’s debts to customers

Chief Restructuring Officer Michael DuFrayne said the companies had approximately $173.1 million in liabilities before filing for bankruptcy.

Around $163.7 million of that amount consists of unsecured IOUs issued to Poolin Wallet customers. The obligations arose after the company suspended withdrawals during the 2022 crypto market downturn.

According to the court filings, about 11,700 retail customers held frozen IOUs worth more than $100 each when withdrawals were halted.

The companies do not plan to restore the business through a reorganization. Instead, Poolin intends to use the bankruptcy process to sell nearly all of its remaining U.S. mining assets.

How much Poolin’s assets are worth

Poolin has signed asset purchase agreements with Thor CALAP LLC, which will act as the stalking horse bidder and set the minimum price for the auction.

The proposal values the asset portfolio at $52 million. Of this amount, $15 million is allocated to the Pyote property, including its power rights and equipment. Another $37 million has been offered for the power rights and equipment at the Tarbush site.

Other buyers will be able to submit higher bids. Any final transaction will require approval from the bankruptcy court.

Court documents also state that the two sites may be sold separately if this would generate more value for creditors.

From success to crisis

Poolin was founded in China in 2017 by Zhibiao “Kevin” Pan, Fa Zhu, and Tianzhao Li. By September 2019, the company was considered one of the world’s largest mining pool operators.

It later launched Poolin Wallet, which allowed users to borrow the USDT stablecoin against crypto collateral and subsequently introduced interest-bearing deposit products.

After China banned Bitcoin mining in 2021, Poolin attempted to move part of its business to the United States. However, the new model soon ran into serious problems.

The company borrowed about $213 million against crypto assets then valued at approximately $355.8 million. When the crypto market crashed in 2022, the collateral was liquidated, leaving Poolin unable to service its debt or process customer withdrawals.

Miners turn to AI for survival

A prolonged bear market, rising Bitcoin mining difficulty, and high electricity costs are forcing mining companies to look for new sources of revenue. Many are diversifying their businesses and partially or fully converting data centers to support artificial intelligence and high-performance computing. This model allows them to make better use of their access to electricity, facilities, and cooling systems while reducing their dependence on the price of Bitcoin.

However, not every company can move into the AI sector. The transition requires additional investment, more advanced equipment, and major infrastructure upgrades. Miners that continue to rely solely on Bitcoin mining and lack cheap power or sufficient capital reserves are particularly vulnerable during market downturns. Under these conditions, mounting debt, falling revenue, and outdated facilities can eventually push them into bankruptcy, as happened with Poolin.

SBI Crypto also recently shut down its mining pool after five years of operation.

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