Poolin, once the world’s largest Bitcoin mining pool, has filed for Chapter 11 bankruptcy protection in the United States as part of a plan to sell its Texas mining assets for $52 million.
The Singapore-based company, along with its U.S. subsidiaries Lonestar Dream Inc. and Lonestar Taproot LLC, submitted voluntary bankruptcy petitions on July 22 in the U.S. Bankruptcy Court for the District of New Jersey.
Court documents show Poolin has between 10,001 and 25,000 creditors, with liabilities estimated between $100 million and $500 million, while its assets are valued at just $1 million to $10 million. Instead of reorganizing its business, Poolin is using the Chapter 11 process to conduct a court-supervised sale of its remaining assets and wind down operations.
Customer IOUs drive debt burden
The bulk of Poolin’s financial burden traces back to the 2022 crypto market crash. According to Chief Restructuring Officer Michael DuFrayne, the debtors owe about $173.1 million, including roughly $163.7 million tied to IOUs issued after Poolin Wallet froze customer withdrawals in September 2022.
At the time, the company froze user funds as falling cryptocurrency prices triggered severe liquidity pressure. Instead of returning deposits, Poolin issued IOU tokens representing customers’ locked balances. Around 11,700 wallet users held balances exceeding $100 when those IOUs were created.
Texas mining sites headed for auction
Poolin has already lined up a buyer for its West Texas mining assets. Thor CALAP LLC agreed to serve as the stalking-horse bidder, offering $15 million for the Pyote mining site and $37 million for the Tarbush site’s power rights and equipment, creating a combined $52 million baseline offer.
Under Chapter 11 procedures, the assets can still attract higher competing bids before the court approves any sale. The two facilities may also be sold separately. Mining and hosting operations at both Texas locations stopped on July 10, leaving only a small team responsible for maintaining the sites during the sale process.
Expansion bet backfired
Poolin’s U.S. expansion was built around expectations that never materialized. After reviewing more than 30 locations, the company chose the Pyote and Tarbush sites in 2021. While early discussions suggested the projects could eventually receive up to 600 megawatts of electricity, only 100 MW was initially allocated.
Expecting far more capacity, Poolin bought mining equipment it could not fully deploy. The excess machines were later sold at discounted prices, resulting in about $8.8 million in losses between fiscal 2023 and 2025. Even before the bankruptcy filing, the Texas operations had accumulated nearly $45.9 million in losses.
China ban triggered the downfall
Poolin’s troubles began after China’s 2021 crackdown on Bitcoin mining forced miners to relocate overseas.
Poolin was founded in 2017 by Zhibiao “Kevin” Pan, Fa Zhu and Tianzhao Li and went on to become one of the world’s largest Bitcoin mining pools. It later expanded into crypto lending through Poolin Wallet, allowing users to take loans in USDT against crypto collateral, as well as providing interest-bearing deposit products.
To fund its operations and its expansion in the U.S., Poolin put up customer collateral with Antalpha Technologies, borrowing some $213 million backed by digital assets then valued at around $355.8 million. The funds helped finance the Texas mining sites, purchase mining machines, process customer withdrawals and cover operating expenses.
But as crypto prices kept falling in 2022, Antalpha liquidated the collateral after the loans nearly matched the value of the pledged assets. At the time, management estimated Poolin owed about $260 million against digital assets worth roughly $265 million.
What comes next
Poolin has remained largely inactive since suspending wallet withdrawals in 2022. The Singapore parent now holds limited assets, including about $1.2 million in a New Jersey bank account, an office lease and an intercompany claim. The company also tried to sell its Texas mining business through a proposed $49 million deal with China Green Agriculture in late 2023, but the transaction never closed.
The court will now oversee the sale of Poolin’s Texas assets. How much unsecured creditors, including Poolin Wallet users, recover will depend on the final sale and the court’s approval of the liquidation plan.
Also Read: From a $3B Valuation to Bankruptcy: Movement Labs Files Chapter 11
