Poolin was bitcoin's biggest mining pool and now it's filing for bankruptcy

Poolin, once the world’s largest bitcoin mining pool with an estimated 18-20% share of the global hashrate in 2019, has filed for bankruptcy protection. The Singapore-based company, along with its two U.S. affiliates Lonestar Dream and Lonestar Taproot, filed for Chapter 11 in New Jersey on July 22, citing debts of approximately $173 million. The filing follows a liquidity crisis in 2022 that left approximately 11,700 customers holding $163.7 million in frozen funds in the form of IOU tokens after Poolin Wallet suspended withdrawals.

An auction bid of $52 million from Thor CALAP LLC for Poolin’s West Texas mining sites represents the main potential recovery for the company’s creditors. These Texas sites constitute the bulk of Poolin’s remaining assets, but efforts to expand in Texas had previously stalled due to delayed grid connection approvals. Poolin co-founder Kevin Pan admitted publicly in late 2022 that the company was experiencing liquidity problems, though he insisted at the time that user funds remained secure.

Poolin’s operational share of bitcoin’s global mining power has effectively dropped to zero over the past few years, following the withdrawal suspensions and the company’s financial difficulties. Users had expressed growing concerns about withdrawal delays as early as late 2022, during a period of widespread crypto market downturn and liquidity stress. CoinDesk’s requests for comment from Poolin were not answered, indicating limited public communication from the firm amid the bankruptcy proceedings.

This bankruptcy filing is significant as Poolin was once a dominant entity in bitcoin mining, representing a substantial portion of global hashpower. The company’s collapse highlights continuing vulnerabilities in the crypto mining sector, especially regarding liquidity management and the risks borne by users who had funds frozen during Poolin’s financial distress.