U.S Court Approves First-Day Motion For Compute North Amid Bankruptcy

Bitcoin mining hosting provider Compute North which filed for Chapter 11 Bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas has received the court’s approval for a few first-day motions.

Pending the hearing of the bankruptcy case, Compute North can now operate its cash management systems, pay insurance obligations and file a list of its creditors.

Noteworthy, the court is yet to issue approval on the mining hosting company’s bankruptcy request.

The U.S Bankruptcy Judge Marvin Isgur issued three more first-day motions to Compute North. Invariably, the company can continue its core operations with this first-day motion while it is still undergoing the bankruptcy process.

As part of its first-day motion, Compute North has permission to keep up with its former bank account and business form.

Conversely, the banks are authorized to also honor checks which had already been issued before the bankruptcy issue came up. Although, this authorization is only effective if the banks are directed to do so by either Compute North or the bankruptcy court.

Similarly, Compute North has been approved by Judge Isgur “but not directed,” to continue intercompany transactions which were already ongoing before the mining host filed for Chapter 11 bankruptcy. With the court’s approval, the company can also design a list of its 30 top creditors, and draw up the address information of its employees, directors, and contractors. 

Bankruptcy Sweeps Across Crypto Firms

While all of these are ongoing, the bankruptcy court will decide on a date for the case hearing.

A clear path to ensure that all affected creditors are repaid their loans will be decided upon soon, especially as the firm has declared that after it successfully pays for the current administrative services it is receiving, nothing will be left to pay its creditors. 

This wave of bankruptcy in the crypto ecosystem stemmed from the Do Kwon TerraUSD/LUNA collapse which cleared out almost $2 trillion in digital assets from the industry. Crypto lender, Voyager Digital had equally filed for a Chapter 11 bankruptcy with a U.S. Bankruptcy Court of the Southern District of New York.  

Beleaguered crypto lender, Celsius Network requested a Chapter 11 bankruptcy in New York barely a month after it suspended withdrawal and trading on its platform.