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Bitcoin miner Argo Blockchain faces bankruptcy

 


Argo Blockchain has liquidity problems. As the company announced on Monday, October 31st, a new round of capital of 27 million US dollars is on the brink. In a press release , the company, which is listed on the London Stock Exchange and Nasdaq, writes:

As previously announced, the Company has entered into a non-binding letter of intent with a strategic investor to raise $27 million through a subscription of common shares. The Company no longer anticipates that this subscription will be completed on the terms previously announced. Argo is examining other financing options.

However, the management resolutely braces itself against the threat of bankruptcy – and sells its assets. A total of 3,843 Bitmain S19J Pro series miners for 5.6 million US dollars were thrown onto the market. According to Argo, this is the last batch of a larger ASIC order. As such, the hashrate would remain at 2.5 exahashes per second, which is about 1 percent of the total hashrate at press time.


Despite all efforts, Argo cannot guarantee the continued existence of the company. The company writes: "Should Argo not receive any funding from future rounds, Argo will generate negative cash flow and cease operations."


The company's premarket price is $1.97. The company is not yet in the penny stock area. However, it is around 92 percent below its all-time high and is performing even worse than Bitcoin.


This is compounded by massive BTC sell-offs by Argo to pay off a $50 million loan extended by Novogratz company Galaxy Digital. According to the quarterly report, the company sold 887 BTC in July alone - and thus logically fueled the downward trend on the market.


Of course, Argo Blockchain is n't the only publicly traded mining company to get bogged down in the Bitcoin bear market. On October 26 it became known that Core Scientific (CORZ) also had massive liquidity problems. In a report to the SEC , the company wrote:


The company's operations and liquidity have been severely impacted by the ongoing decline in the price of bitcoin, the increase in electricity costs, the increase in the global bitcoin network hash rate, and the litigation with Celsius Networks.


The Nasdaq-listed company's share price is $0.20 at the time of writing.

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