Bankrupt Bitcoin Miner Rhodium Secures Court Approval to Borrow in USD or BTC

Rhodium Enterprises, a Bitcoin mining firm in bankruptcy, has received court approval to borrow up to $30 million in USD or 500 BTC from Galaxy Digital. The financing arrangement, notable for its use of Bitcoin, highlights the financial pressures in the crypto mining industry.

Rhodium Enterprises, Inc., a Bitcoin mining company that filed for bankruptcy on August 24, has received court approval for an unconventional financing plan as it navigates Chapter 11 proceedings. The court has granted Rhodium the option to borrow funds either in U.S. dollars or Bitcoin, an unusual move in bankruptcy financing. The offer comes from Galaxy Digital, led by Mike Novogratz, which has extended up to $30 million in U.S. dollars or 500 Bitcoin to the mining firm. These loans come with annual interest rates of 14.5% and 9.5%, respectively.

In a unique twist, the Bitcoin loan can be repaid in U.S. dollars based on the exchange rate at the time of repayment, contingent on the lender’s approval. This financing structure is particularly noteworthy due to the inherent volatility of Bitcoin, which makes predicting the total repayment amounts challenging, even with fixed interest rates.

Rhodium’s choice to explore Bitcoin-based financing is part of a broader trend among crypto firms facing financial difficulties. For example, Bittrex Inc. also considered Bitcoin-based financing as it wound down its U.S. operations and sought to repay customers.

According to court documents filed by David Dunn, Rhodium’s co-chief restructuring officer, the company’s financial troubles stem from a deteriorating relationship with its landlord and power supplier, Whinstone US, Inc. Rhodium operates Bitcoin mining facilities in Texas and is among several crypto mining firms currently under significant financial pressure.

Bitcoin mining companies have been strained by reduced mining rewards following the recent Bitcoin halving and mounting debt issues. While cash-rich firms like Riot Platforms and Cleanspark have expanded their operations by acquiring other miners to boost their hashrate, companies with tighter budgets, such as Iren and Cipher, have focused on securing greenfield opportunities that demand less immediate capital.

In a related development, Bitfarms, another Bitcoin mining firm, announced on August 21 its acquisition of Stronghold Digital Mining for approximately $125 million, including $50 million in assumed debt. This acquisition highlights the ongoing financial complexities within the Bitcoin mining industry.

Our creator. creates amazing NFT collections! 
Support the editors - Bitcoin_Man (ETH) / Bitcoin_Man (TON)

Pi Network (Guide)is a new digital currency developed by Stanford PhDs with over 55 million participants worldwide. To get your Pi, follow this link https://minepi.com/Tsybko and use my username (Tsybko) as the invite code.

Binance: Use this link to sign up and get $100 free and 10% off your first months Binance Futures fees (Terms and Conditions).

Bitget: Use this link Use the Rewards Center and win up to 5027 USDT!(Review)

Bybit: Use this link (all possible discounts on commissions and bonuses up to $30,030 included) If you register through the application, then at the time of registration simply enter in the reference: WB8XZ4 - (manual)