Crypto Mining Firm Giga Watt Files for Bankruptcy, Owes Investors Millions

Giga Watt, a cryptocurrency mining firm launched last year by bitcoin miner Dave Carlson, has recently filed for a Chapter 11 bankruptcy, as it currently owns its creditors millions and has failed to complete its initial plans.

According to CoinDesk, the firm filed for bankruptcy at a court in the Eastern District of Washington earlier this week, and revealed it still owes its biggest 20 unsecured creditors “nearly $7 million.”

The firm, per the documents, has an estimated $50,000 worth of assets, and liabilities that are in the range of $10 to $50 million. Its creditors include electricity provider Neppel Electric, which is owned nearly $500,000, and its local utilities provider, which is owed $310,000.

The minutes of a meeting with the firm’s shareholders reportedly read:

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.

Giga Watt notably raised $22 million worth of cryptocurrency last year through an initial coin offering (ICO), and at the time was seen as part of the cryptocurrency ecosystem’s innovation, bringing the 21st-century’s developments to a site near the Douglas County airport, where it was set to set up mining “pods” that, coupled with cheap electricity and proper maintenance, would’ve helped smaller scale miners in the market.

Things didn’t go as planned for the firm, however, as back in January a group of investors sued it for allegedly running an unregistered securities offering. With the lawsuit, the investors were reportedly looking to get their money back, as the firm failed to meet construction deadlines.

Last month, according to the Seattle Times, Giga Watt was already facing millions of dollars in debt, and laid off 80% of its staff while suspending all construction. Carlson himself left the company in August as he “wasn’t able to effect” what he believed was the right direction for it.

Some of Giga Watt’s problems came from the crypto market’s downturn, as since January it has been plummeting. Bitcoin, the flagship cryptocurrency, started the year at little over $13,000, and is now at about $4,600. George Turner, who was running the company at the time, revealed it had to make “some really radical changes” as it “couldn’t wait” for the cryptocurrency market to start recovering.

As CryptoGlobe covered, a research report from blockchain research firm Diar revealed that cryptocurrency mining was starting to become unprofitable for miners paying electricity prices

Overstock Committed to Crypto Even After CEO Patrick Byrne’s Exit

Michael LaVere
  • Overstock said it is "absolutely" committed to crypto in the wake of CEO Patrick Byrne's resignation.
  • Company continues to support its high profile tZERO blockchain project. 

Popularo nline retailer Overstock remains committed to cryptocurrency even after the sudden resignation of its long-time CEO and crypto supporter Patrick Byrne. 

Crypto Supporter Patrick Byrne Resigns

On Aug. 22, Byrne announced he would be resigning his position as CEO following a series of comments made the week before about his involvement in FBI investigations and a romantic relationship with a Russian spy. Shares for Overstock plummeted more than 35% following Byrne’s bizarre comments, but rallied in the aftermath of his resignation. 

Despite making a sudden exit, Byrne had established Overstock as one of the most high-profile companies to support bitcoin and cryptocurrency, a legacy that plans to continue even in his absence. 

Newly appointed interim CEO Jonathan Johnson was asked by Yahoo Finance if the company will retain its focus on crypto and blockchain. 

He said, 

Absolutely, yes. The fledgling blockchain business is doing well.

He continued, 

Our team at Medici Ventures, which is the blockchain-focused business, is still working hard, and those different companies in the Medici family are growing at a nice rate.

Earlier in the month, Overstock reported suffering a 23% decrease in revenue for Q2 2019, despite claiming that the blockchain division was performing well. Overstock operates the notable tZERO platform, which was recently opened to retail investors for trading. In addition, the company announced in July that they would be issuing a digital-equivalent of a dividend for shareholders.