Sunday, November 27, 2022
HomeBTCIris Energy Is Facing Default Claim Of $103 Million From Its Creditors

Iris Energy Is Facing Default Claim Of $103 Million From Its Creditors

Iris Energy, a company that mines Bitcoin (BTC), claims it has received a default notice from Bitmain Technologies, a company that manufactures mining rigs, according to a new filing that the company made with the United States Securities and Exchange Commission on Monday.

Iris Energy was accused in the notice of “failing to participate in good faith restructuring negotiations” over some principal payments that were due on November 8. In addition, Iris Energy was served with a second notice by its creditors the previous week, saying that the company “failed to maintain appropriate insurance,” which would constitute a default if it was not resolved within the next ten days.

Iris Energy is a cryptocurrency mining company with operations mostly based in Canada. They mine Bitcoin using only green energy and have their headquarters in Australia. The firm had an average mining hash rate of 3.9 EH/s in the month of October, which was equivalent to around 1.5% of the mining capability of the Bitcoin network.

Iris Energy has said that the three debt facilities at issue include equipment finance loans for a total of $1 million, $32 million, and $71 million respectively. These loans are backed by 0.2 exahash per second (EH/s), 1.6 EH/s, and 2.0 EH/s of Bitcoin miners respectively. According to the company, the notification will not have any impact on the 2.4 EH/s of miners, as well as the capacity of any of its data centres or the development pipeline.

It would seem that the company has run into financial trouble as a result of a confluence of factors, including rising power costs, falling Bitcoin values, and increased network difficulty. Despite having $53 million in cash on hand and bringing in over $8.7 million each month in revenue, the company revealed that its monthly gross profit only amounts to $2 million under the current set of circumstances. This figure is significantly lower than the $7 million that must be paid each month in principal and interest payments.

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Reporter
Jeewan Singh is CryptoShrypto’s content writer and a seasoned writer with over two years of experience in writing about Indian Securities Market. Jeewan's participation in Blockchain and Cryptocurrency started in late 2020, and he hasn't looked back since. The technical and economic outcomes of cryptocurrency are what spark his curiosity, and he keeps one eye on the market.
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