In an effort to avoid declaring bankruptcy, the cryptocurrency mining company Argo Blockchain claims it has been in talks to sell its assets and trying to “engage in an equipment financing transaction.”
In a Dec. 12 announcement, Argo Blockchain stated that it was in the midst of “advanced negotiations” to sell specific assets and that it was in danger of running out of money within a month. Despite claims to the contrary, the mining company’s trading on the London Stock Exchange (LSE) and Nasdaq was suspended on December 9 due to “inadvertently published materials” pertaining to the company’s financial situation.
Argo claimed that as of Dec. 12, it had resumed trading on the London Stock Exchange, but at the time of publication, the LSE had no data to support this claim. On December 8, the mining company’s shares closed at $0.69 on the Nasdaq and 6.70 pounds on the LSE.
There is no guarantee that the company will be able to avoid filing for voluntary Chapter 11 bankruptcy in the United States, but the company is hopeful that it will be able to complete the transaction without doing so. The UK Financial Conduct Authority has been asked by the company to reinstate the listing of its ordinary shares, and this is anticipated to happen as soon as is practical.
If the mining company cannot raise the necessary funds to maintain operations, it will be at risk of going into the “near term” cash flow negative. Argo reported selling some of its mined Bitcoin holdings during the bear market in order to settle a loan from Galaxy Digital, from which it had obtained crypto-backed loan agreements for 2021.
Argo reported owning 126 Bitcoin and its equivalents as of Nov. 30. At the time of publication, the cryptocurrency had a value of $17,033.
If Argo were to declare bankruptcy, it would be the most recent in a line of cryptocurrency companies to report financial problems during a bear market. Many international regulators and lawmakers have criticised the cryptocurrency market, citing the failure of Terraform Labs, Celsius Network, Voyager Digital, BlockFi, and most recently FTX.