Poolin Files Chapter 11 — Bitcoin Mining Giant Owes $173M
- Jul 25
- 4 min read
Poolin bankruptcy is now official: the company that was once the largest Bitcoin mining pool on the planet filed for Chapter 11 protection on July 22, 2026, in the US Bankruptcy Court for the District of New Jersey, listing roughly $173 million in total debt. The filing closes a four-year death spiral that began when Poolin froze customer withdrawals in 2022 — and it leaves about 11,700 wallet users facing the likelihood of recovering only a fraction of their money.
The Singapore-based company filed alongside its US affiliates, including Lonestar Dream and Lonestar Taproot, which operate its Texas mining facilities. According to court records reported by CoinDesk and The Block, the overwhelming bulk of the debt — approximately $163.7 million — consists of unsecured promissory notes issued to wallet customers after Poolin suspended withdrawals during the 2022 crypto market crash and replaced deposits with IOUs.
The numbers paint a stark picture of how little is left. Poolin reported just $1.2 million in remaining cash, and its mining operations shut down entirely on July 10, 2026. The company’s two West Texas sites — Pyote and Tarbush — are heading to auction with a combined floor bid of $52 million, with prospective buyer Thor CALAP showing interest at $15 million for Pyote and $37 million for the Tarbush power rights and equipment.
Even if the auction hits or exceeds the floor, the math is brutal for creditors. A $52 million sale would cover roughly 30 percent of total claims before administrative and legal fees are deducted, meaning actual recovery for the 11,700 affected wallet holders — each with balances above $100, and many with far more — will likely be substantially lower. Analysts reviewing the filing describe it bluntly as a liquidation dressed in Chapter 11 clothing rather than a genuine restructuring.
Poolin’s fall is one of the most dramatic in crypto mining history. Founded in 2017 by former Bitmain employees, the pool commanded an estimated 18 to 20 percent of Bitcoin’s global hashrate at its 2019 peak, briefly ranking as the world’s number-one mining pool ahead of giants like F2Pool and Antpool. At its height, Poolin processed blocks worth billions of dollars a year and expanded aggressively into wallet services, offering yield products on customer deposits.
That wallet business proved to be the fatal flaw. When the 2022 market collapse — accelerated by the failures of Terra, Celsius, and FTX — drained liquidity across the industry, Poolin admitted in September 2022 that it faced a liquidity crisis and abruptly halted all wallet withdrawals. Customer funds that users believed were simply parked in mining payout wallets had been deployed elsewhere, and the company converted those balances into promissory notes it never managed to repay.
The years since have been a slow unwinding. Poolin attempted token-based IOU schemes, partial repayment plans, and asset sales, while its share of global hashrate collapsed to negligible levels as miners fled to competitors. The final shutdown of mining operations on July 10 removed the company’s last source of operating revenue, making the New Jersey filing all but inevitable.
The bankruptcy lands at a turbulent moment for the broader mining industry. Bitcoin is trading near $65,000 after holding remarkably steady through the recent $800 billion AI-stock selloff, but mining economics remain punishing in the post-halving era. Marginal operators face record network difficulty, elevated energy prices driven by the Middle East oil shock, and competition from AI data centers bidding up the same power capacity — a squeeze that has pushed several smaller miners toward distress this year.
Ironically, the assets Poolin is liquidating may be worth more to AI than to Bitcoin. West Texas sites with large grid connections have become prized acquisition targets for AI infrastructure developers, and industry observers expect bidding for the Pyote and Tarbush power rights to draw interest well beyond the crypto sector, echoing the wave of miner-to-AI conversions sweeping the industry in 2026.
For the 11,700 creditors, the process now moves to claims administration, asset auctions, and a distribution plan that could take a year or more to finalize. Attorneys following the case note that unsecured noteholders sit near the back of the repayment line, behind secured creditors and administrative costs, and that recoveries in comparable crypto bankruptcies — Celsius, Voyager, BlockFi — ranged widely depending on asset sales and market timing.
The Poolin collapse also revives a hard lesson the industry keeps relearning: mining pools and exchanges that double as yield-bearing wallets carry hidden counterparty risk. Funds left on platform were legally transformed into unsecured loans the moment withdrawals froze, and four years of waiting has ended not in repayment but in bankruptcy court. Self-custody advocates have seized on the filing as the clearest cautionary tale since FTX.
The bottom line: Poolin’s Chapter 11 filing formally buries what was once Bitcoin’s biggest mining pool, with $173 million owed, $1.2 million in the bank, and a $52 million auction that will not come close to making creditors whole. As the assets pass to new owners — possibly AI companies — the case stands as a bookend to the 2022 crypto credit crisis and a warning that in crypto, the platform holding your coins is only as safe as its balance sheet.
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