Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Bitcoin Mining Manufacturer Files for Bankruptcy
Authors: Joel R. Glucksman, Donald Scarinci
Date: June 17, 2014
Key Contacts
Donald Scarinci
Firm Managing Partner
201-896-4100 dscarinci@sh-law.comBack
HashFast, a manufacturer of bitcoin mining equipment, has filed for protection under Chapter 11 of the bankruptcy law, according to CoinDesk. A creditor, Liquidbits, had filed an involuntary Chapter 7 bankruptcy against HashFast, forcing it to request a conversion to a voluntary Chapter 11 reorganization proceeding.
U.S. Bankruptcy Judge Dennis Montali granted HashFast’s request June 7, after coming close to appointing a Chapter 7 trustee at creditor LiquidBits’ request, the news source reported. The latter firm alleged that HashFast failed to make good on a $6 million order. Just one month ago, the company laid off half of its workforce and issued a public denial that it was filing for bankruptcy.
In a blog post, HashFast explained that it would be entering Chapter 11, and that it intends to reorganize in order to provide more value to its creditors than it would in a liquidation. Eduardo DeCastro, the CEO of the company, will be stepping down. Monica Hushen, HashFast CTO, will be handling business operations and bankruptcy matters. The company also announced that it had retained Katten Muchin Rosenman LLP as its bankruptcy council.
According to CryptoCoinsNews, HashFast’s troubles began when its customers began demanding refunds, as the company’s hardware began lagging behind that of the competition. Bitcoin mining takes large amounts of processing power and electricity, and returns are cut in half regularly as a part of the currency’s algorithm, which mandates an asymptotical approach to 21 million bitcoins. This means that mining remains economically viable only if the currency continues to appreciate in value or the cost of mining technology continues to fall.
HashFast has cut its costs and intends to restructure to a more viable business strategy. Bitcoin mining can still be viable on a large scale, but it is yet to be seen whether HashFast will be.
If you have any questions about this post or would like to discuss your company’s creditors’ rights and bankruptcy matters , please contact me, Joel R. Glucksman at www.ScarinciHollenbeck.com.
- Practices: Bankruptcy & Creditors' Rights
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Breach of Contract Explained: Types and Consequences
Breach of contract disputes are the most common type of business litigation. Therefore, nearly all New York and New Jersey businesses will likely have to deal with a contract dispute at least once. Understanding when to file a breach of contract lawsuit and how long you have to sue for breach of contract is essential […]
Author: Brittany P. Tarabour
How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide
Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]
Author: Christopher D. Warren
Gross Lease vs. Net Lease: Understanding the Key Differences
Commercial leases can take a variety of forms, which is often confusing for both landlords and tenants. Understanding the different types, especially the gross lease structure, is important when selecting the lease that best suits your needs. One key distinction between lease types is how rent is calculated and paid. This article addresses the two […]
Author: Robert L. Baker, Jr.
What to Do If You Are Impacted by a Retailer Bankruptcy Part 2
Over the past year, brick-and-mortar stores have closed their doors at a record pace. Fluctuating consumer preferences, the rise of online shopping platforms, and ongoing economic uncertainty continue to put pressure on the retail industry. When a retailer seeks bankruptcy protection, a myriad of other businesses are often impacted. Whether you are a supplier, customer, […]
Author: Brian D. Spector
The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business
Since his inauguration two months ago, Donald Trump’s administration and the Congress it controls have indicated important upcoming policy changes. These changes will impact financial services policies and priorities. The changes will particularly affect cryptocurrency, as well as banking rules and regulations. Key Regulatory Changes in Cryptocurrency For example, in the burgeoning cryptocurrency business environment, […]
Author: Dan Brecher
Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies Part 1
The retail sector has experienced a wave of bankruptcy filings over the last year. Brick-and-mortar businesses in financial distress include big-name brands like Big Lots, Party City, The Container Store, and Vitamin Shoppe. When large retailers seek bankruptcy protection, they are not the only businesses impacted. Landlords can be particularly hard hit. While commercial landlords […]
Author: Brian D. Spector
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.