Court Greenlights BTC Loan for Bankrupt Bitcoin Mining Company
Rhodium Encore LLC, a bankrupt bitcoin mining company, has secured court approval for a unique financing plan that allows it to borrow either $30 million in U.S. dollars or 500 bitcoin from Galaxy Digital Holdings Ltd.
The dollar loan comes with a 14.5% interest rate, while the bitcoin loan has a 9.5% interest rate, with Rhodium able to repay the BTC loan in dollars at a market rate. This type of cryptocurrency-based funding is unusual in Chapter 11 cases due to bitcoin’s volatility. Rhodium, which filed for bankruptcy in August 2024, faced financial difficulties from a dispute with its landlord and power supplier, Whinstone US Inc., later acquired by Riot Platforms.
Clever Robot News Desk 2nd September 2024
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