BCause Mining LLC, a Bitcoin (BTC) mining firm in Virginia Beach, United States was ordered by a federal judge to liquidate its assets and shut down operations, according to a report by local news publication, Pilot Online.
The court order followed a bankruptcy claim filed by the company earlier this year even though it had received a larger chunk of a $500,000 grant in early 2018 from the city to expand its operations, and potentially become the most massive bitcoin mining operation in North America.
However, that dream has now been shuttered with the federal judge deciding to convert the case involving BCause Mining LLC and BCause LLC from a reorganization to a chapter 7 liquidation, and subsequently appointing a trustee for the firm’s liquidation.
Reporting on the reason behind BCause Mining’s failure, Pilot Online noted that a large chunk of investments that the company received was dedicated to buying mining equipment owned by others who paid the firm an estimated $1 million monthly fee to maintain the machines.
BCause at the time of the bankruptcy allegedly owes 23 creditors – including its executives, its landlord, the U.S. Customs and Border Protection, and an electricity distribution company –as much as $13.3 million. The firm’s liquidation also leaves it 27 full-time workers and four part-time workers without employment and puts the city’s chance of recouping their investment into the company in jeopardy.
Since the city’s agreement upon issuing the grant is that BCause must be in operation for at least five years and repay one-fifth of the award if they fail to operate for one year, Virginia Beach spokeswoman Julie Hill says they currently do not know the amount to seek if they file a claim with the bankruptcy court.
The Virginia Beach, as it stands, is an unsecured creditor under the grant and would only receive a payback after BCause has settled its secured creditors.Never miss out on our daily crypto news, stories, tips, and price analysis. Join us on Twitter | Telegram | Facebook or subscribe to our weekly Newsletter.