Bitcoin miner NFN8 Group filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Western District of Texas on February 2, according to court documents.
The company cited a catastrophic fire at its Crystal City, Texas, facility as the primary catalyst for the insolvency proceeding. The blaze occurred between Christmas and New Year’s Day 2025, reducing the company’s mining capacity and associated revenue by approximately 50%, according to NFN8’s Chapter 11 filing.
On February 6, the presiding judge issued an order granting NFN8’s request for complex Chapter 11 case treatment, meaning the case will be expedited. The court scheduled the first hearing, which will be virtual over zoom, for February 12.
The Chapter 11 filing values the company’s assets at under $50,000, with liabilities ranging from $1,000,001 to $10 million across anywhere from one to 49 creditors. The bulk of NFN8’s assets include over 5,000 ASIC bitcoin miners owned by the subsidiary NFN8 Capital. The company operates facilities in Crystal City, Texas and two locations in Iowa.
The IRS appears as the largest unsecured creditor in the filings, with the agency holding a disputed claim of approximately $3.2 million related to 2021 federal taxes.
NFN8 argues that economic pressures from the bitcoin market and the 2024 Bitcoin halving compounded its operational setbacks. NFN8 Group noted that revenue recovery following the halving proved slower than historical patterns suggested.
Legacy issues with hosting partners further complicated the company’s financial history, the company claims in the filing, arguing that the 2022 bankruptcy of hosting provider Core Scientific previously stranded thousands of its ASIC miners. The company says that this event forced NFN8 Group to suspend lease payments temporarily while it secured new hosting arrangements.
Litigation costs also contributed to the financial strain leading up to the petition, the company claimed. The miner faced escalating legal expenses from lawsuits and arbitration filed by participants in its sale-leaseback program. This financing model involves more than 250 equipment lease counterparties listed as the primary creditor group.
The court granted NFN8’s request for relief to continue operating during the restructuring process. To this end, NFN8 Group secured $2.75 million in Debtor-in-Possession (DIP) financing from Twelve Bridge Capital. This liquidity aims to stabilize the business while it reorganizes its debts.
