Poolin Bitcoin Mining Pool Files Chapter 11 Bankruptcy After 2022 Freeze
In brief
- Poolin filed Chapter 11 bankruptcy covering parent company and two U.S. affiliates
- Company froze customer withdrawals in September 2022, issuing IOUs instead of Bitcoin repayment
- 11,700 wallet holders owed $163.7 million in unpaid IOUs
- Poolin's Texas mining operations shut down July 10; assets undergoing auction
- $52 million stalking-horse bid covers mining infrastructure only, far below user claims
From Peak to Collapse
Poolin was founded in Beijing in 2017 by Zhibiao "Kevin" Pan, Fa Zhu, and Tianzhao Li, all veterans of mining-hardware maker Bitmain. At its peak, the company controlled nearly a fifth of the network's global hashrate, making it one of the most consequential mining operations in Bitcoin's ecosystem. But the crypto crash of 2022 triggered a cascade of events that would ultimately end the company.
The trouble started in September 2022, when Poolin froze withdrawals for Poolin Wallet and Pool Account users, citing liquidity issues tied to withdrawal demand during the crash. Rather than making customers whole, Poolin issued IOU tokens as placeholders for real Bitcoin, and those debts were never repaid.
The scale of the damage became clear in the bankruptcy filing. About 11,700 wallet holders are owed $163.7 million in unpaid IOUs, according to a court declaration from Chief Restructuring Officer Michael DuFrayne.
The Texas Auction and Slim Recovery Odds
Poolin's Texas mining and hosting operations shut down entirely on July 10, and the company stated it does not intend to resume. Now the company is liquidating its assets. Poolin is auctioning its two West Texas sites, with Thor CALAP LLC offering a $52 million stalking-horse bid as an opening offer.
That bid is a fraction of what users are owed. The $52 million covers only the physical mining infrastructure and falls well short of what users are owed. The Texas operations themselves were a drag on the company's finances. The Texas units had accumulated roughly $45.9 million in losses since they opened, plus another $8.8 million from selling equipment at discounted prices between fiscal 2023 and 2025.
Recovery for the 11,700 IOU holders now depends largely on what the Texas auction brings in, more than three years after their withdrawals were first frozen. The bankruptcy court will oversee the process, but the gap between liabilities and assets leaves little room for meaningful repayment.
