Bitcoin mining pool Poolin seeks Chapter 11 protection in New Jersey

Poolin, a Bitcoin mining pool operator, along with two affiliated entities, has filed for Chapter 11 bankruptcy protection in the U.S. state of New Jersey, CoinDesk reported. The companies said all three petitions were filed voluntarily on July 22, and the U.S. Bankruptcy Court for the District of New Jersey has consolidated the cases for joint administration. Court filings list Poolin's liabilities at $100 million to $500 million, with an estimated 10,000 to 25,000 creditors. Assets were reported at $1 million to $10 million, well below the stated debt load. The filings also indicate the debtors expect to make some distribution to unsecured creditors. The Chapter 11 process includes Lonestar Taproot LLC and Lonestar Dream, Inc. The businesses remain operating under the current management team, with the proceedings coordinated under the main case. The court approved a sale and bidding framework on August 17 that covers nearly all debtor assets and allows the use of a "stalking horse bidder." The deadline for qualified bids is September 8. If competing bids emerge, an auction is tentatively set for September 10, followed by an asset sale hearing on September 18. Creditors have also been scheduled to attend the Section 341 meeting remotely on August 28. A revised notice said the deadline for filing general claims has not yet been set. The associated mining site has been largely shut down. Reorganization lead Michael DuFrayne said in his opening statement that the sale process will include assets held by Poolin and its two U.S.-based affiliates. According to the filings, Lonestar Dream had largely completed a wind-down of mining operations prior to the bankruptcy and began dismantling equipment after ending services for its client, Elektron Energy. The company kept a small group of employees to oversee the site and equipment, support asset sales, and manage bankruptcy-related work. Lonestar Taproot is described as the holder of the mine-site equipment and related assets, including power assets, buildings, improvements, and substation infrastructure. Court documents also show Lonestar Taproot worked with parties affiliated with mining hardware maker Bitmain from March 2022 through December 2023. The filings say Bitmain invested about $34.4 million during the partnership and recovered roughly $24.1 million upon exit, with the project posting significant losses over the period. Poolin's liquidity strains date back to 2022. In September 2022, the firm suspended withdrawals from PoolinWallet, citing liquidity constraints and increased withdrawal demand. It later proposed issuing six IOU tokens on a 1:1 basis tied to users' balances of BTC, ETH, USDT, LTC, ZEC, and DOGE, and said it was considering steps including new investment, debt-to-equity conversions, and asset sales. The filing also underscores ongoing pressure across the Bitcoin mining sector into 2026. Industry data shows hash rate prices have stayed low after the halving, tightening breakeven margins for older mining rigs. Publicly traded miners also accelerated Bitcoin sales from reserves in the first quarter to support cash flow.