Giga Watt, one of North America’s largest cryptocurrency miners, filed for bankruptcy at Washington’s Eastern District federal court, saying it would be unable to repay unsecured investors and naming hundreds of creditors in its filing.
Giga Watt had between $10 and $50 million in liabilities, with assets within the range of only $50,000, according to court documents. The firm has filed for bankruptcy protection, meaning it is likely to liquidate all assets in its bid to repay secured creditors.
Taken by the profit thirst during the insane highs in the second half of 2017, the Giga Watt ICO, providing access to the crypto mining operation founded by former Microsoft engineer Dave Carlson, raised $22.3 million in May 2017.
In the months since Giga Watt has been the target of civil lawsuits from investors seeking to recoup losses, and worse, the US Securities and Exchange Commission (SEC) charged the firm with the sale of unlicensed assets. The plaintiffs allege that the US-based company misrepresented facts to purchasers, and failed to keep funds in escrow until used as promised.
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Went bust with prices meltdown
The Bitcoin economy frequently sees companies come and go, and Giga Watt is not the only big fish in the mining game to have dropped out of the race.
Like those in other sectors of the crypto industry, bitcoin mining providers have struggled with higher energy costs, regulatory uncertainty, and the endless bear market. Unfortunately for them, the crypto selloff has gathered pace this week, and the market is a sea of red.
While filing bankruptcy is being touted as a loss-cutting measure, the company has reportedly been winding down operations and laying off workers for months in preparation for the halving.
The Washington state-based facility allows investors to participate in cryptocurrency mining through the WTT token. The tokens represent the right to use the Giga Watt processing center’s capacity rent-free for 50 years, to accommodate 1 Watt’s worth of mining equipment power consumption. Token owners can use this capacity to accommodate their own miners or can rent out the WTT token to other users.