Quick Take
- Poolin Technology filed for Chapter 11 bankruptcy and is seeking court approval to sell Texas mining assets through a $52 million stalking-horse bid.
- The debtors reported approximately $173.1 million in prepetition obligations, including about $163.7 million in unsecured IOUs issued after Poolin Wallet suspended customer withdrawals in 2022.
Poolin Technology Pte. Ltd., the Singapore-based parent company of what was once one of the world's largest bitcoin mining pools, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of New Jersey after its Texas bitcoin mining and hosting operations ceased activity on July 10.
The filing includes two U.S. affiliates, Lonestar Dream Inc. and Lonestar Taproot LLC. Poolin's petition lists estimated creditors between 10,001 and 25,000, assets between $1 million and $10 million, and liabilities between $100 million and $500 million.
In a declaration accompanying the filing, Chief Restructuring Officer Michael DuFrayne placed the debtors' prepetition obligations at approximately $173.1 million. Roughly $163.7 million of that amount consists of unsecured IOUs issued to Poolin Wallet customers following the company's suspension of withdrawals during the 2022 cryptocurrency market downturn. Around 11,700 retail users held frozen IOUs exceeding $100 each when the suspension began, according to the filing.
Rather than pursuing a reorganization, the companies intend to use the Chapter 11 process to sell substantially all of their remaining U.S. mining assets.
The debtors have signed asset purchase agreements with Thor CALAP LLC, which has agreed to serve as the stalking horse bidder, according to the filing. The proposal values the portfolio at $52 million, including $15 million for the Pyote property and related power rights and equipment, and $37 million for the Tarbush site's power rights and equipment.
The stalking horse bid establishes the minimum price for the auction, with the assets remaining subject to higher offers and approval by the bankruptcy court. According to the court filing, the two properties may also be sold separately if doing so maximizes value for creditors.
Poolin origins
Poolin was founded in China in 2017 by Zhibiao “Kevin” Pan, Fa Zhu and Tianzhao Li. By September 2019, the startups was widely regarded as the world's largest cryptocurrency mining pool providers. The company also developed Poolin Wallet, which offered users the ability to borrow the stablecoin USDT against cryptocurrency collateral and later introduced interest-bearing deposit products.
After China prohibited bitcoin mining in 2021, Poolin's attempt to rebuild around U.S. mining encountered difficulties. The firm had borrowed roughly $213 million against cryptos then valued at approximately $355.8 million. When the 2022 crypto market crashed, collateral liquidations followed, leaving the company unable to service debt and customer withdrawals.
The proposed sale follows a three-month marketing campaign that contacted more than 335 potential buyers, producing 28 nondisclosure agreements and seven letters of intent. Lonestar Dream and Lonestar Taproot recorded cumulative losses of approximately $45.9 million since their formation, according to the filing.
Poolin has not operated in the ordinary course since 2022. The Singapore parent retains approximately $1.2 million in a New Jersey bank account, an office lease, and an intercompany claim.
Zhibiao Pan owns 100% of the equity interests in Poolin Technology Pte. Ltd. and Lonestar Dream Inc., according to the list of equity holders filed with the bankruptcy court. Lonestar Taproot LLC is wholly owned by Lonestar Dream.