Several unfortunate cases are springing up in the Bitcoin and crypto ecosystem. The main reason for these adverse events comes down to the current bearish trend of the cryptocurrency market. Regardless of experts’ optimistic predictions, investors are still skeptical about future investments.
Some crypto firms seek ways to sustain their staff and clients. Others are ensuring they don’t run out of funds before the end of 2022. One example of such companies is the Bitcoin miner Iris Energy.
Iris Energy is a Bitcoin mining firm based on its data center infrastructure. It aims to power operations by accessing under-utilized or abundant renewable energy.
Its main objective is to support communities and the broader Bitcoin network and decarbonize energy markets.
Iris Energy Faces Crisis Due to Crypto Crash
On Tuesday, Iris Energy revealed its transactions with NYDIG regarding the arrangement of funds. NYDIG is a Bitcoin broker institution responsible for providing funds for ASICs – Bitcoin mining machines.
The Bitcoin mining company mentioned a few issues with some of the mining vehicles. It stated that some SPVs – Special Purpose Vehicles are not operating up to standard regarding cash flow. So, it’s pretty challenging to meet up with the debts to its lender.
Iris stated that there is still an outstanding principal debt of $104 million to be paid out of the three Non-Resource SPVs financed by the company. In addition, the Non-Resource SPVs are expected to pay an interest of $7 million monthly. This figure appears relatively high considering the $2 million profit they make in the same period.
Moreover, the SPVs miners are to receive between $65 million and $70 million, which is much lower than the cost. The condition is not very favorable for the BTC mining company. So, it stated that the second and third SVPs do not make the principal payments slated for November 8. This decision might result in further crisis, but the company is willing to tackle that.
Iris Energy Faces Crisis Due To Crypto Crash
On Tuesday, Iris Energy revealed its transactions with NYDIG regarding the arrangement of funds. NYDIG is a BTC broker institution responsible for providing funds for ASICs – Bitcoin mining machines.
The BTC mining company mentioned a few issues with some of the mining vehicles. It stated that some SPVs – Special Purpose Vehicles are not operating up to standard regarding cash flow. So, it’s pretty difficult to meet up with the debts to its lender.
Iris stated that there is still an outstanding principal debt of $104 million to be paid out of the three Non-Resource SPVs financed by the company. In addition, the Non-Resource SPVs are expected to pay an interest of $7 million monthly. This figure appears relatively high considering the $2 million profit they make in the same period.
Moreover, the SPVs miners are to receive between $65 million and $70 million, which is much lower than the cost. The condition is not very favorable for the BTC mining company. So, it stated that the second and third SVPs do not make the principal payments slated for November 8. This decision might result in further crisis, but the company is willing to tackle that.
There is a tendency for the company’s cumulative hash power of 3.6 EH/s to go offline. But this will only happen if the event comes down to default. This hash power is equal to the total hash rate of the BTC network, which is about 1.5%.
Meanwhile, Iris Energy is not the only crypto firm facing the challenge of paying debts through bankruptcy. In October, Core Scientific shared a post stating the possibility of default due to its inability to meet certain debts.
According to the company, only about 24 BTC were left in its reserve and $26 million cash. The drop is significant considering that as of June, it had up to 7000 BTC in its possession.
featured Image from Pixabay, Charts by TradingView
Denis
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