Bitcoin mining firm BCause has been ordered to liquidate its assets, according to a report by The Vanguard Plot.
Earlier in the year, the company has filed for Chapter 11 bankruptcy. Already, it seems the $500,000 grant given to the firm by Virginia Beach in 2018 was not enough to revive its fortunes.
It’s quite remarkable how BCause Mining has fallen since it was launched. In fact, the firm was touted as one of the largest Crypto mining companies in the world a few years ago.
Now, it is facing liquidation, and the investors are hoping to recover their investments before this happens.
More problems from the firm’s long line of creditors
BCause lost a Lawsuit of $1.9 against WESCO, one of its major vendors, in 2018. In that same period last year, it had to clear up an unpaid bill of $1.7 million owed to Dominion Energy, its electricity provider.
In addition to these financial messes, BCause still has an unpaid due of $6.8 million to BMG Operation.
These are bills accrued for hosting the firm. In Bcause’ estimation, the total monetary claims it owes its creditors amount to $13.3 million.
This means that if the firm becomes liquidated, its creditors will have to bear some of the loss.
Market fluctuations or investment has gone wrong
Most of the credits received from BCause were invested in mining equipment owned by other mining companies.
This is where the crux of the situation lies. In most cases, the firm gives out almost $1 million monthly to make sure their machines are hosted.
Recouping the $500,000 grant
As the firm is battling with liquidation, Virginia Beach has embarked on a process to recoup its $500,000 grant invested in the mining firm.
According to Julie Hill, who is the spokeswoman of Virginia Beach, they are considering filing a bankruptcy claim on Bcause to enable them to recoup some or all of the investment they made in grants.
With all those claims hanging on the firm’s neck, it is almost impossible that it will still continue its mining business.
The question is not even the continuation of the business, but how to settle the long list of creditors hanging on its neck.
As recently as October 9, there was a news report by Virginia-Pilot (a local news outlet) that a federal judge has acted upon the bankruptcy report filed by BCause Mining LLC. The firm has 27 part-time and full-time workers.
The judge has ordered it to lay them off and liquidate its assets as soon as possible.
Once the whole liquidation procedure is complete, WESCO will be among the first to receive its claim, since the company has a secured claim. Likewise, BCause is asking the court to approve the payment of
How BCause intends to settle its creditors
In August this year, BCause opened up to the court that they intend to settle their creditors in installments rather than in bulk.
According to the spokesperson, paying back their creditors could take between two and four years. The actual time will depend on how soon they can start up another enterprise.
The problem with this idea is, the launch will require them to seek capital from another firm. Going by the firm’s financial situation, it will be difficult to get a new investor for the capital they seek.