Giga Watt, a Bitcoin (BTC) Mining company filed for bankruptcy last week after the prices of Bitcoin dropped by 30%. The firm could not bear the crash and had to shut down due to no significant profit margins to gain from Bitcoin mining. The firm is in the news again as it has to change the mentioned assets from a mere $50K initially to $10-50 Million now.
The spokesperson from the company suggested that the error in judgment in the first draft occurred due to the rush. They haven’t changed any other aspect of the documents apart from the assets. The liability remains at a staggering $10 – $50 million.
Andrey, GigaWatt admin, in his statement on their Telegram page said that it was an error and an honest mistake due to the hurriedness at the time of filing. Amendment has been done, and there are no other changes.
The Probable Cause For Bankruptcy: Over Ambitiousness
The company is facing multiple lawsuits from its investors even before it filed for bankruptcy. The probable cause for such a downfall is over ambitions and not planning thoroughly. The Bitcoin mining firm decided to build a multimillion-dollar campus of 24 prefabricated crypto mining “pods” in 2017. The prices of Bitcoin were surging to new heights then.
The prices of Bitcoin throughout 2018 is on the decline, which affected the plans of building multi-million dollar facility heavily. The project costs changed multiple times exceeding the estimates by many folds; there were construction delays due to non-payment of dues making the project a distant dream as it could never see the light of day.
The company had to lay off many employees, make financial reforms and cut down its expenditure massively, but even after all these tricks, the brand could never revive itself in time. As a result, they had to finally file for bankruptcy, which they could not get right in the first attempt. The breakdown in the firm started to appear from August itself when the founder David Carlson left the company.
The lawsuits have been filed by Douglas County Public Utility District, with a $310,000 claim and two other Singapore-based firms, Cryptonomos PTE, and Giga Watt PTE, with combined claims of $3.67 million.