BCause Mining LLC, a Virginia Beach-based Bitcoin mining company that was once awarded a $500,000 grant by the city, has been ordered by a federal court judge to liquidate its assets and shut down operations.
A report by the local news agency, Virginian Pilot, confirmed the development which comes off the back of BCause’s bankruptcy filing earlier this year for not being to pay back its creditors an amount estimated at $13.3 million.
Per the report, the City of Virginia had in 2018 given BCause the sum of $436,823 (part of the grant) following a pledge by the company to invest more than $60 million in an ambitious expansion plan that would have made it the largest crypto mining firm in North America.
However, the path to achieving that goal proved tough to BCause as the company ran into multiple debts and eventually lost a lawsuit that permitted one of its creditors, WESCO Distribution, to recoup $1.9 million from the company’s already distressed financial accounts.
It is a result of the growing debt at BCause and no relief in sight that prompted a federal judge to convert the company’s case from an earlier announced reorganization, to a chapter 7 liquidation.
The report further noted that the 27 full-time employees and four part-time workers had lost their jobs as a result of the development while Chicago Bankruptcy Judge Janet S. Baer also approved the appointment of a trustee in the case.
For the city of Virginia Beach, the path to recovering at least some of the money that is invested in BCause is also an uphill with the city’s grant only qualifying it as an unsecured creditor.
Such a status means that even if the city files a bankruptcy claim as Virginia Beach spokeswoman Julie Hill confirmed, they must wait for BCause to pay off its other creditors.
In another update about a crypto-related business closing shop, Stmarket.co reported earlier this month that altcoin-focused crypto exchange, Coinexchange.io shut down operations for financial reasons.