Argo Blockchain reports insufficient funds, 'no assurance' it can avoid Chapter 11 bankruptcy
Crypto mining firm Argo Blockchain has reported it had been negotiating to sell assets and “engage in an equipment financing transaction” in an effort to avoid filing for bankruptcy.
In a Dec. 12 announcement, Argo Blockchain said it was at risk of having insufficient funds to continue operating within a month, and was in the middle of “advanced negotiations” to sell certain assets. Though the mining firm said it had not filed for Chapter 11 bankruptcy in the United States, “inadvertently published materials” related to the company’s financial situation led to the suspension of trading on the London Stock Exchange, or LSE, and Nasdaq on Dec. 9.
Argo reported it had resumed trading on the London Stock Exchange as of Dec. 12, but there was no data recorded with the LSE at the time of publication. Shares of the mining firm closed at $0.69 on the Nasdaq on Dec. 8, and 6.70 pounds on the LSE.
“The Company is hopeful that it will be able to consummate the transaction outside of a voluntary Chapter 11 bankruptcy filing in the United States, although there is no assurance that the Company can avoid such a filing,” said Argo. “The Company has requested that the UK Financial Conduct Authority restore the listing of its ordinary shares and that is expected to happen as soon as practicable.”
The mining firm reported in October that it was at risk of becoming cash flow negative “in the near term” should it fail to raise needed capital to continue operations. Amid the bear market, Argo reported selling some of its mined Bitcoin (BTC) holdings to pay down a loan from Galaxy Digital, from which it secured crypto-backed loan agreements in 2021.
As of Nov. 30, Argo reported holding 126 BTC and Bitcoin equivalents. The price of the cryptocurrency was $17,033 at the time of publication.
Related: Argo Blockchain facility in West Texas expects to start mining Bitcoin in May
Should Argo file for Chapter 11, it would be the latest in a string of crypto firms reporting financial difficulties amid a bear market. Many global regulators and lawmakers have pointed to the collapse of Terraform Labs, Celsius Network, Voyager Digital, BlockFi, and most recently FTX in criticisms of the crypto market.
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