BCause LLC, a US-based crypto mining company, has filed for bankruptcy protection in the Northern District of Illinois Eastern Division, along with its own subsidiary BCause Mining LLC. In a letter to its shareholders, the company states it will continue to operate as “its cash flow before interest, tax, and depreciation, and amortization remain positive”.
The filing shows that BCause owes nearly $10 million to its creditors, while its computer equipment is estimated at around $14 million. Both BCause and its subsidiary have failed to pay energy bills in the total amount of $3.6 million, or $1.7 million to electricity supplying company Dominion Energy and $1.9 million to supplier WESCO Distribution.
The Virginian Pilot newspapers report that BCause had $911,000 in its bank account on April 11. However, the company insists it owes $1.3 million to WESCO and not $1.9 claimed by the energy supplier. It filed for bankruptcy after it lost a lawsuit to WESCO, which gained the right to seize BCause’s bank account to repay itself. The Virginia Beach-based firm intends to ask the court to allow it to use the seized account to keep the business going.
“I would hope and expect that we can work with them. The bankruptcy decision was the result of a “combination of things,” and the downturn in cyber currency values hadn’t helped,” BCause CEO Fred Grede said.
BCause was founded in 2013 in Virginia Beach, a city in southeast Virginia. In 2018, BCause expanded its operations, which led to the company becoming a regional hub for mining operations. A significant part of its business included lending its computer equipment to other miners.
It gained national attention when it received a nearly $500,000 grant from the Virginia Beach city. So far, the city has paid $436,823 of the potential $500,000 grant, as the company invested $64.8 million in its rented 84,000-square-foot space in downtown city.
Although it promised the city it would add a 100 new jobs earning an average of $60,000 a year, BCause currently employs 27 full-time members of staff.