Court filings show the former bitcoin mining giant and two U.S. affiliates seeking a court-supervised asset sale. This comes after years of financial distress following the 2022 crypto market downturn.
Poolin Technology PTE. LTD., once among the world’s largest bitcoin mining pool operators, has filed for Chapter 11 bankruptcy protection in the United States alongside subsidiaries Lonestar Dream Inc. and Lonestar Taproot LLC. According to voluntary petitions filed on July 22, 2026, in the U.S. Bankruptcy Court for the District of New Jersey, the companies intend to use the bankruptcy process primarily to sell their remaining Texas mining assets. Rather than reorganize as an operating business, they will focus on selling assets. The proceedings are jointly administered under Case No. 26-18325. The official restructuring website published by Verita Global confirms the filing and related court schedule.
Chapter 11 Filing Centers on Liquidation Rather Than Recovery
According to the first-day court filings, Poolin’s restructuring strategy focuses on a sale of substantially all remaining U.S. mining assets under Section 363 of the U.S. Bankruptcy Code. In addition, the debtors have already entered stalking-horse purchase agreements with Thor CALAP LLC. These deals establish a combined $52 million minimum bid for two West Texas mining sites.
The proposed transactions value the Pyote facility at approximately $15 million and the Tarbush operation at $37 million. Those bids establish the floor for a competitive auction but remain subject to higher offers and bankruptcy court approval.
Court documents indicate the debtors ceased mining operations on July 10, 2026. They retained only a limited workforce to secure facilities and support the sale process.
Bankruptcy Traces Back to Poolin Wallet Crisis
The bankruptcy filings connect the company’s financial problems to events that began during the cryptocurrency market collapse in 2022.
Chief Restructuring Officer Michael DuFrayne stated in a court declaration that the debtors have approximately $173.1 million in prepetition obligations. Roughly $163.7 million of those liabilities consist of unsecured IOUs issued to Poolin Wallet users after the platform suspended customer withdrawals during the 2022 market downturn. Furthermore, around 11,700 wallet users reportedly held balances exceeding $100 when those IOUs were issued.
Poolin suspended withdrawals in September 2022 after severe market volatility reduced the value of collateral supporting its lending activities. As a result, the company subsequently faced legal claims from affected users in multiple jurisdictions while attempting to rebuild its business around U.S.-based mining infrastructure. This shift came after China’s 2021 ban on domestic cryptocurrency mining.
Texas Expansion Failed to Deliver Expected Scale
The court filings also provide new details on why Poolin’s U.S. mining expansion struggled. This was despite relocating operations after China’s mining restrictions.
According to the restructuring declaration, Poolin expected to receive as much as 600 megawatts of electrical capacity for its Texas facilities. However, they initially secured only about 100 megawatts. The lower-than-expected capacity left the company with excess mining equipment. Much of this was later sold at discounted prices.
The filings state that equipment sales generated approximately $8.8 million in losses between fiscal years 2023 and 2025. In addition, the company disclosed that a previously announced $49 million transaction involving China Green Agriculture did not ultimately transfer ownership of the Texas assets.
Why The Filing Matters For The Mining Industry
Poolin was founded in 2017 and quickly became one of the largest bitcoin mining pools globally. However, China’s regulatory crackdown forced major miners to relocate overseas. Its difficulties illustrate how multiple industry shocks, including regulatory changes, declining cryptocurrency prices, leverage, and infrastructure challenges, can compound over several years.
The Chapter 11 process also demonstrates that digital asset companies continue to rely on traditional U.S. bankruptcy procedures to maximize recoveries for creditors while disposing of specialized infrastructure. Unlike reorganizations intended to preserve ongoing operations, Poolin’s filing is structured around an orderly liquidation of mining assets.
Notably, the bankruptcy petition estimates between 10,001 and 25,000 creditors, with assets listed between $1 million and $10 million and liabilities estimated between $100 million and $500 million. However, more detailed schedules provide additional breakdowns of obligations.
Risks, Uncertainties and What Comes Next
The ultimate recovery available to creditors remains uncertain.
Any distributions will depend on the outcome of the asset auction, administrative expenses, competing bids, and approval of a liquidation plan by the bankruptcy court. While the debtors have indicated that the sale process may generate value for unsecured creditors, the court has not yet approved any final distributions.
The first-day hearing is scheduled for July 27, 2026, in the U.S. Bankruptcy Court for the District of New Jersey. Creditors and industry participants will be watching for court approval of bidding procedures and auction timelines. They will also be looking for any additional disclosures regarding the debtors’ remaining assets and creditor recoveries.
