- Argo Blockchain has not filed for bankruptcy, although this may be inevitable
- The company had its shares suspended on Friday after suggestions that it might be about to go under
- Argo warned that it might not last another month without fresh investment
Troubled Bitcoin miner Argo Blockchain has managed to stave off bankruptcy, although it has admitted that it may not see out the month. Following news at the end of October that it needed emergency funding to continue operating and the suspension of its shares on Friday, the crypto world was full of expectation that yesterday would bring an announcement of Chapter 11 bankruptcy, especially after a drafted announcement was accidentally posted to its website and then taken down. However, Argo has said that it is working on an “equipment financing transaction” that will keep it going for the short term, but admitted that its future isn’t looking good.
Argo Blockchain’s Troubled Times
FullyCrypto reported at the end of October that Argo experienced a shock when $27 million of promised funding disappeared, leaving it facing an uncertain future. The firm sold over 3,800 ASIC miners for a temporary liquidity boost, but warned shareholders that unless it could find a new source of income it might face bankruptcy.
Yesterday we reported how trading of Argo Blockchain shares was suspended by the London Stock Exchange following a leaked accidental posting of a Chapter 11 redundancy filing by the company, leading to almost everyone with knowledge of the story expecting the company to make the formal announcement yesterday.
“No Assurance” That Argo can Avoid Bankruptcy
In a press release yesterday, Argo revealed that the bankruptcy posting, and the resultant share trading suspension, was the result of an error:
…certain draft materials were inadvertently published as a test page on the Company’s website. The inadvertently published materials, which implied that the Company was filing for Chapter 11 bankruptcy, led to the suspension of trading of the Company’s securities on the London Stock Exchange and Nasdaq on Friday, 9 December 2022. Shareholders should note that the Company has not filed for bankruptcy at this time.
While this may have seemed like good news, the rest of the press release put the situation into sharp context. Argo revealed that it is “at risk of having insufficient cash to support ongoing business operations within the next month,” and that it is in “advanced negotiations” regarding further sales of mining equipment and possibly some of its other infrastructure. It added that while it was hopeful that such a deal would stave off bankruptcy, “there is no assurance that the Company can avoid such a filing”.
Times are famously tough for Bitcoin miners right now, and although the difficulty rate has dropped a little in recent days, this is still not enough to make Bitcoin mining a worthwhile pursuit at present.
