U.S. Bitcoin mining firm Giga Watt files for bankruptcy amid mounting debts
U.S. Bitcoin mining firm Giga Watt has filed for bankruptcy on Monday, as its liabilities far exceeded its assets. The mining company filed for Chapter 11 protection, stating that it is “insolvent and unable to pay its debts when due”, according to documents filed with the Eastern District of Washington bankruptcy court.
The court filing showed that the company had listed assets less than $50,000 while its liabilities were estimated between $10 million-$50 million.
The filing stated that Andrey Kuzenny, Giga Watt’s chief coordinator who holds over 10% of the company’s shares, called for a shareholders’ meeting to decide on the firm’s course of action regarding its mounting debts.
Kuzenny, along with Giga Watt co-founder Leonid Markin and legal counsel Edward Khaptakhev, represented the required majority and voted for the company to file for Chapter 11 protection. The executives hold 1,660 shares of the company each.
Giga Watts’ debts pile up, co faces lawsuits
According to a report by Washington-based iFiberOne, the company owes local creditors over $1.2 million. The company owes Cryptonomos, a Singapore-based platform that conducted Giga Watt’s initial coin offering (ICO), $2.3 million. In addition, it owes Giga Watt PTE, its mining equipment retail seller, $1.4 million. Interestingly, Kuzenny is a co-founder of Cryptonomos.
Giga Wattis also facing two lawsuits that allege wire fraud and impropriety in its ICO, which was conducted in July last year and raised $22.3 million.
The iFiberOne report added that the company’s CEO Dave Carlson had stepped down in August and the firm slashed its workforce from 63 employees to just 16 in September.
Compounding its woes, the Port of Douglas County has reportedly begun the process of evicting the cash-strapped company from Douglas County.