Poolin has filed for Chapter 11 bankruptcy protection in the United States as it moves to sell its Texas bitcoin mining assets under a court-supervised process while carrying about $173 milli
Poolin has filed for Chapter 11 bankruptcy protection in the United States as it moves to sell its Texas bitcoin mining assets under a court-supervised process while carrying about $173 million in prepetition obligations.
SummaryAccording to filings in the U.S. Bankruptcy Court for the District of New Jersey, Singapore-based Poolin and its U.S. subsidiaries, Lonestar Dream Inc. and Lonestar Taproot LLC, filed voluntary Chapter 11 petitions on July 22. The debtors said the proceedings are intended to facilitate an orderly sale of their remaining assets rather than revive the business as an operating mining company.
Court records show Poolin estimated it has between 10,001 and 25,000 creditors, assets worth between $1 million and $10 million, and liabilities ranging from $100 million to $500 million.
A declaration filed by Chief Restructuring Officer Michael DuFrayne states that the companies owed approximately $173.1 million before bankruptcy. About $163.7 million of that total relates to unsecured IOUs issued to Poolin Wallet customers after withdrawals were suspended during the cryptocurrency market downturn in 2022.
Mining and hosting operations at the company’s Pyote and Tarbush facilities in West Texas ended on July 10, with only a small workforce remaining to secure the sites and assist with the sale process, according to the declaration.
Meanwhile, the debtors have already signed separate asset purchase agreements with Thor CALAP LLC, establishing a combined stalking-horse bid of $52 million for the Texas assets.
The agreements include a $15 million offer for the Pyote property together with its related power rights and equipment, while a separate $37 million bid covers the Tarbush site’s power rights and equipment. Court filings note that the Tarbush transaction does not include the property’s surface-use agreement.
Under Section 363 of the U.S. Bankruptcy Code, the stalking-horse agreements set the minimum price for the auction while allowing higher competing offers before any final sale receives court approval. Each mining site may also be sold independently if separate bids provide better value for creditors.
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Before reaching the proposed transactions, the debtors spent roughly three months marketing the assets to more than 335 prospective buyers and investors. According to the court declaration, the outreach targeted cryptocurrency miners, artificial intelligence and high-performance computing operators, hyperscale data center companies, private equity firms and real estate investment trusts.
The marketing effort resulted in 28 signed nondisclosure agreements and seven letters of intent covering both individual facilities and the combined portfolio.
Court filings state that interest from AI infrastructure operators increased the potential value of the sites because of their existing electrical systems and power capacity, even though Poolin’s own mining and hosting business had become unprofitable. Since their formation, Lonestar Dream and Lonestar Taproot accumulated losses of approximately $45.9 million.
Founded in China in 2017 by Zhibiao “Kevin” Pan, Fa Zhu and Tianzhao Li, Poolin grew into one of the world’s largest bitcoin mining pools and held the top position globally by September 2019.
Alongside mining, the company expanded into financial services through Poolin Wallet, which allowed customers to borrow USDT against cryptocurrency collateral before later introducing interest-bearing deposit products.
The business model came under increasing pressure after China prohibited bitcoin mining in 2021 and digital asset prices declined sharply the following year.
According to the Chapter 11 declaration, Poolin transferred customer collateral to Antalpha Technologies and borrowed roughly $213 million against cryptocurrency valued at approximately $355.8 million at the time.
The filing states that the borrowed funds supported construction of the Texas mining facilities, purchases of mining machines, customer withdrawals, interest payments and day-to-day operating expenses.
As cryptocurrency prices continued falling, Poolin Wallet suspended withdrawals in September 2022 and distributed IOU tokens representing customers’ frozen balances.
Around 11,700 wallet users held balances exceeding $100 when approximately $163.7 million worth of IOUs were issued, according to the declaration.
The court filing further states that Antalpha liquidated Poolin’s collateral in November 2022, when management estimated the company owed about $260 million against digital assets then valued at roughly $265 million.
Since then, Poolin has not resumed normal business operations. Its remaining assets now include approximately $1.2 million held in a New Jersey bank account, an office lease and an intercompany claim. Certain Poolin Wallet users have also filed legal claims against the debtors in both the United States and Singapore.
While the bankruptcy centers on creditor recoveries, the sale process also shows how mining infrastructure has become valuable for buyers outside the cryptocurrency industry.
According to the Chapter 11 declaration, many parties approached during the marketing process were focused on artificial intelligence and high-performance computing rather than bitcoin mining alone, as existing power connections and electrical infrastructure have become increasingly attractive for AI data center projects.
Poolin’s bankruptcy also comes months after another major mining operator entered insolvency proceedings. Earlier this year, Russian miner BitRiver faced court-supervised bankruptcy over unpaid debts tied to power supply, data center operations and service contracts.
The interest follows a pattern already emerging across publicly listed mining companies. Earlier this week, Ionic Digital secured SEC approval for its planned Nasdaq listing after repositioning much of its business toward AI infrastructure. The company, created from Celsius Network’s bankruptcy restructuring, has converted part of its Texas campus from bitcoin mining to AI computing under a long-term agreement with AI cloud provider Nscale.
A similar strategy has been adopted by IREN, which acquired Spain’s Nostrum Group in June to add approximately 490 megawatts of grid-connected power for AI cloud expansion across Europe. The company has reported rising AI cloud revenue even as bitcoin mining income declined. HIVE Digital and Bitdeer have also announced projects converting mining facilities into high-performance computing infrastructure.
Poolin’s case differs from those companies because it is liquidating assets through Chapter 11 rather than expanding into AI operations itself. Still, the court filings indicate that demand from AI-focused buyers has strengthened interest in the Texas properties during the auction process.
The debtors said unsecured creditors, including Poolin Wallet customers, could receive distributions if the auction produces successful sales. According to the Chapter 11 filings, however, the final recovery will depend on competing bids, administrative expenses, sale costs and court approval of a liquidation plan.
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