About $164 million of Poolin’s debt stems from IOU tokens issued to customers after the company froze withdrawals during the crypto market collapse in 2022.
Singapore based Bitcoin mining company Poolin filed for Chapter 11 bankruptcy protection on July 22 in New Jersey, along with its US subsidiaries, Lonestar Dream Inc. and Lonestar Taproot LLC. The company is also seeking court approval to sell its Texas mining assets for $52 million.
The filing comes almost four years after Poolin halted customer withdrawals, leaving thousands of users with IOU tokens and triggering a lengthy dispute with creditors.
Poolin Faces $173 Million in Liabilities
Court documents submitted to the US Bankruptcy Court for the District of New Jersey show that Poolin has between 10,001 and 25,000 creditors. The company estimated its assets at between $1 million and $10 million.
According to Chief Restructuring Officer Michael DuFrayne, Poolin’s total liabilities before bankruptcy stand at approximately $173.1 million. Around $163.7 million of that amount relates to unsecured IOU tokens issued to Poolin Wallet customers after withdrawals were suspended.
Rather than attempting to revive its mining business, the bankruptcy process is focused on selling the company’s remaining Texas operations. Court filings reveal that Lonestar Dream ended mining and hosting activities at its Pyote and Tarbush facilities on July 10.
Poolin has signed asset purchase agreements with Thor CALAP LLC worth a combined $52 million as the initial stalking horse bid. The proposal includes $15 million for the Pyote site, including power rights and equipment, and $37 million for the Tarbush power rights and equipment. The transaction is still subject to higher offers and court approval.
Before reaching the agreement, Poolin spent more than three months marketing the assets to more than 335 potential buyers, including cryptocurrency miners as well as artificial intelligence and high performance computing companies. That effort resulted in 28 confidentiality agreements, seven letters of intent, and three additional expressions of interest.
China Mining Ban Added to Poolin’s Challenges
Poolin expanded into Texas after China prohibited cryptocurrency mining in 2021. The company expected access to as much as 600 megawatts of electricity but ultimately secured only 100 megawatts. As a result, much of the mining equipment purchased for its US expansion became surplus.
Some of that equipment was later sold at a loss, contributing to an $8.8 million financial hit between fiscal years 2023 and 2025. Overall, Lonestar Dream and Lonestar Taproot recorded combined losses of about $45.9 million.
Wallet Collapse Remains the Core of Creditor Claims
Poolin’s financial troubles extended well beyond its mining operations. In June 2022, Bitcoin’s decline below $20,000 triggered margin calls from Tether against collateral pledged through Poolin Wallet. The company transferred nearly all of that collateral to Antalpha and borrowed approximately $213 million against digital assets valued at just under $356 million.
In September 2022, Poolin suspended wallet withdrawals and issued roughly $163.7 million in IOU tokens to affected customers. Court filings indicate that about 11,700 wallet users held balances exceeding $100.
When Bitcoin dropped below $16,800 in November 2022, Poolin shut down its operations and Antalpha liquidated the collateral. Company management estimated that around $260 million was owed to Antalpha against digital assets valued at approximately $265 million at the time.
Poolin was once among the world’s largest Bitcoin mining pools, controlling around 14 percent of the Bitcoin network’s mining power in 2019. Today, the company’s remaining value largely depends on the sale of its Texas assets and the outcome of the bankruptcy proceedings.
The court supervised auction will determine how much creditors ultimately recover, with payouts depending on competing offers, sale related costs, administrative claims, and final approval of the proposed liquidation plan.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
