Report: Bitcoin Mining Firm CoinTerra Files for Bankruptcy

CoinTerra, Austin-based vendor of bitcoin mining servers and provider of hosting services for mining equipment, has filed for bankruptcy, Austin Business Journal reported.

The company is involved in at least two ongoing lawsuits. One of them is by a data center provider C7 Data Centers, which is suing it to recover millions of dollars in allegedly unpaid colocation fees. CoinTerra has filed a countersuit against C7, claiming it hasn’t been able to make money and pay its customers and lenders because C7 shut down its servers, preventing it from mining the cryptocurrency.

A rapid drop in bitcoin value, which went from $1,100 at one point in 2013 to about $240 today, is creating a stir in the bitcoin ecosystem. Some companies announced they would stop their bitcoin mining servers temporarily, until the market recovers, while others, such as CoinTerra, taking what is likely to be a fatal blow.

Because CoinTerra, and some of its peers, have taken some data center space from commercial providers, those providers are feeling the impact as well. CenturyLink is another major data center provider for CoinTerra, but the company has been tight-lipped about its dealings with the customer.

Because of C7 shutting down its servers, CoinTerra defaulted on its debt, the company’s CEO Ravi Iyengar told Data Center Knowledge earlier this month. Iyengar did not respond to a request to comment on the bankruptcy filing.

According to the Business Journal report, the company owes between 200 and 999 creditors from $10 to $50 million. Its assets are valued in the $10 to $50 million range. CoinTerra has reportedly noted that it will not be able to pay unsecured creditors.

The bankruptcy petition was filed by Timothy Davidson of Andrews Kurth LLP, a bankruptcy attorney.