According to a recent report, Giga Watt, a U.S.-based bitcoin mining firm has declared bankruptcy. The firm is reportedly owing millions of dollars to creditors.
Giga Watt Filled for Chapter 11 Bankruptcy
Giga Watt, has reportedly filed for Chapter 11 bankruptcy at a court in the Eastern District of Washington. The mining firm told the court that it is owing nearly $7 million to 20 unsecured creditors.
A notable mention on the list of the unsecured creditors includes the firm’s electricity provider Neppel Electric as well as the local utility provider. Neppel Electric is owed about $500,000 while the Douglas County utility provider is being owed a total sum of over $310,000.
As of the time of filling, Giga Watt has an estimated assets worth which is less than $50,000. Comparing this to its estimated liabilities which is standing at nothing less than $10 million, the company can not be savaged.
Before filing for bankruptcy, the company board of directors and owners had a meeting with investors of the company. At the meeting, the current state of the company was discussed, after which the decision to file for bankruptcy was reached. An excerpt from the minute of the meeting reads:
“The corporation is insolvent and unable to pay its debts when due. The corporation and its creditors would best be served by reorganization of the corporation under Chapter 11 of the Bankruptcy Code.”
According to information on the company’s official website, Giga Watt was founded by a bitcoin miner who goes by the name Dave Carlson. Dave had plans to open up the mining industry to smaller scale miners. He hopes to achieve this through the creation of customized mining “pods” “along with a cheap and stable electricity supply and round-the-clock maintenance at a facility in central Washington.”
Investors Asking for a Refund
In order to allow investors to buy a stake in the company’s services, he decided to hold an initial coin offering (ICO) in May 2017. The ICO helped Giga Watt, raise about $22 million-worth of cryptocurrency at the time.
Unfortunately, some of those who invested in the company decided to collect back their money simply because Giga Watt has failed to meet construction deadlines.