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Giga Watt, a U.S.-based cryptocurrency mining firm, has filed for bankruptcy while the company owes millions of dollars to creditors, CoinDesk reported.
On Monday, the company filed for bankruptcy at a court in the Eastern District of Washington. According to the court documents viewed by CoinDesk, Giga Watt owes nearly $7 million to its biggest 20 unsecured creditors.
With estimated assets worth less than $50,000, the company’s estimated liabilities are somewhere around $10-$15 million. Creditors include the utilities provider in its Douglas County base, and electricity provider Neppel Electric, which it owes nearly half a million dollars.
A special meeting of shareholders of Giga Watt was held on November 18. According to the minutes of the meeting:
“The corporation is insolvent and unable to pay its debts when due. The corporation and its creditors would best be served by reorganization of the corporation under Chapter 11 of the Bankruptcy Code.”
Founded by bitcoin miner Dave Carlson, Giga Watt aimed to open up the mining industry to small-scale miners. In September, it targeted large B2B customers through its new construction – a 5 MW site hosting three pods – which were catered toward customers looking for transaction-based high-performance computer services, according to a press release on CoinPedia.
Last year, Giga Watt conducted an initial coin offering (ICO) in which it attracted about $22 million-worth of cryptocurrency at the time. However, the ICO led to its own share of problems.
In January, a group of plaintiffs sued the company for allegedly conducting an unregistered securities offering and were seeking the return of their investments. In a press release, American cryptocurrency investor law firm Silver Miller announced that it has commenced a federal court lawsuit on behalf of an investor in the 2017 pre-functional ICO promulgated by Giga Watt alleging that
“Giga Watt violated securities laws by selling investments in its cryptocurrency mining farm without registering those investments with the necessary regulatory entities. Moreover, the lawsuit alleges that as Giga Watt failed to timely issue its cryptocurrency tokens and provide the plaintiff the benefit for which he paid, the plaintiff suffered financial loss in excess of a million dollars.”
