Poolin, once the world’s largest bitcoin mining pool with a substantial 2019 share of global hashrate, has filed for Chapter 11 bankruptcy in New Jersey along with its U.S. affiliates Lonestar Dream and Lonestar Taproot, carrying debts around $173 million.

The company plans to use Chapter 11 to liquidate and sell its crypto mining assets, ceasing operations rather than pursuing a traditional reorganization.

Founded in China in 2017 by Zhibiao Pan, Fa Zhu, and Tianzhao Li, Poolin rose to prominence before China’s 2021 mining ban forced a US-focused rebuild.

The asset sale is being marketed through a court-supervised process, with potential for higher bids as demand for AI data infrastructure and the sites’ power capacity and hardware grows.

A first-day hearing is slated for late July, with bid procedures in August, an auction if offers qualify in September, a sale hearing mid-September, and closing by late November; payouts to wallet holders depend on the final sale price and lien allocations.

The proposed asset package values the portfolio at about $52 million, allocating $15 million to the Pyote site and $37 million to the Tarbush site for power rights and equipment, with the auction allowing higher offers and potential separate asset sales.

This case reflects a broader industry trend of rising electricity costs squeezing miners and driving restructurings or pivots toward AI infrastructure and data-center opportunities.

The bankruptcy aims to maximize recoveries for unsecured creditors, including wallet holders, through asset sales and court-approved auction results.

The sale process has been highly competitive, with outreach to more than 335 potential buyers, 28 non-disclosure agreements, and seven letters of intent.

The auction could determine whether the assets are more valuable to AI operators than traditional miners, potentially reshaping outcomes for the West Texas sites and related liabilities.

Texas operations expanded to access up to 600 MW, but only 100 MW were available initially, contributing to ongoing losses and a wind-down strategy focused on selling assets rather than restarting mining.

The court will decide how liens and priority claims are treated, with the sale motion proposing to transfer liens to sale proceeds while preserving their validity and priority, and sale costs paid from proceeds.