Poolin Technology and two U.S. affiliates filed for Chapter 11 bankruptcy in New Jersey on July 22, reporting between $1 million and $10 million in assets against $100 million to $500 million in liabilities and more than 10,000 creditors, according to court filings. A court-approved asset sale is now moving toward a Sept. 18 final hearing.
According to the bankruptcy petition, the companies reported estimated assets of between $1 million and $10 million, while liabilities range from $100 million to $500 million. The filing also indicates the debtors have between 10,001 and 25,000 creditors, underscoring the scale of the restructuring.
Michael DuFrayne, the companies’ chief restructuring officer, said in a first-day declaration that the Chapter 11 process is designed to maximize value through an orderly sale of assets for the benefit of creditors and other stakeholders.
Chapter 11 process sets stage for major asset sale
The Poolin bankruptcy is moving quickly toward a court-supervised sale after the court approved bidding procedures for substantially all of the debtors’ assets on Aug. 17.
The order authorizes Poolin to identify a stalking horse bidder, establish competitive bidding procedures and, if necessary, conduct an auction for the assets. Qualified bids must be submitted by Sept. 8, while a competitive auction is scheduled for Sept. 10 should multiple bidders emerge.
A final hearing to approve the proposed sale has been scheduled for Sept. 18 at 11 a.m. ET in Trenton, New Jersey.
DuFrayne told the court that Chapter 11 provides “the best opportunity to preserve and realize value” through a structured sales process rather than a piecemeal liquidation. His declaration also notes that a limited workforce has remained in place to safeguard mining infrastructure, maintain equipment and support the bankruptcy administration.
The restructuring spans assets held across Poolin and its two U.S. subsidiaries, including mining facilities, power infrastructure, buildings, substations and related operational equipment.
Mining operations unraveled after years of financial strain
While the Poolin bankruptcy filing is recent, the company’s financial troubles began nearly four years ago during the crypto market downturn.
In September 2022, Poolin shocked users by suspending withdrawals from PoolinWallet following a severe liquidity shortage and an unusually high volume of withdrawal requests. The company halted wallet withdrawals, flash trades and internal transfers while allowing mining operations and mining-pool rewards to continue.
To address customer balances, Poolin introduced six IOU tokens representing Bitcoin, Ethereum, Tether, Litecoin, Zcash and Dogecoin holdings on a one-to-one basis. At the time, the company said it was exploring fresh investment, debt-to-equity restructuring and asset sales to restore liquidity.
Those measures ultimately failed to reverse the company’s financial trajectory.
The filing also sheds light on the winding down of Lonestar Dream, which had largely ceased mining-site operations before entering bankruptcy. According to court documents, the subsidiary ended services for customer Elektron Energy and began removing mining equipment from its facilities, leaving only essential personnel to protect assets.
Meanwhile, Lonestar Taproot continues to hold valuable infrastructure tied to those mining operations. The entity previously operated as a partnership involving mining hardware manufacturer Bitmain between March 2022 and December 2023. Court records state that Bitmain invested approximately $34.4 million into the venture before exiting and receiving roughly $24.1 million, following significant operating losses.
Thousands of creditors await next steps
A key milestone in the Poolin bankruptcy case arrives on Aug. 28, when creditors are scheduled to participate in a remote Section 341 meeting. The meeting will allow creditors to question the debtors under oath regarding their financial affairs and restructuring plans.
Although the bankruptcy notice confirms that unsecured creditors are expected to receive distributions, the court has not yet established a general deadline for filing proofs of claim.
Claims are being administered by Verita Global, which has been appointed as the case’s administrative adviser. Creditors must submit original claim forms by mail or hand delivery to the company’s claims processing center in El Segundo, California.
The debtors are represented by Archer & Greiner, P.C., while restructuring specialists include DuFrayne LLC as crisis manager, Singapore-based Oon & Bazul LLC for cross-border insolvency matters, and McCarn, Weir & Sherwood P.C. for oil, gas and mineral-related legal issues.
Bitcoin mining industry continues to face mounting pressure
The Poolin bankruptcy comes at a challenging moment for the broader Bitcoin mining sector, where profitability has been squeezed by declining hashprice and post-halving economics.
Industry analysts have noted that many public mining companies sold record amounts of Bitcoin during 2026 as revenues deteriorated. More than 32,000 BTC were reportedly liquidated during the first quarter, reflecting growing pressure on miners to fund operations rather than accumulate reserves.
The economics have become particularly difficult for operators using older-generation mining machines. Hashprice has fallen into the high-$20 range per petahash per day—well below the roughly $35 breakeven level often cited for less efficient hardware.
That environment has fueled a wave of restructurings across crypto infrastructure businesses. Poolin’s case stands out because of its scale, its thousands of creditors and its potential implications for mining assets across North America and Asia.
As the Poolin bankruptcy advances toward September’s bidding deadline and potential auction, the outcome will determine not only the future of its mining infrastructure but also how much value can ultimately be recovered for creditors after one of Bitcoin mining’s most dramatic corporate collapses.
