Poolin Files Chapter 11, Lines Up $52M Sale of Texas Bitcoin Mining Assets
Poolin, once one of the world’s largest bitcoin mining pools, filed for Chapter 11 bankruptcy protection alongside two U.S. affiliates as the group seeks to sell its West Texas mining assets and wind down operations.
Singapore-based Poolin, Lonestar Dream Inc. and Lonestar Taproot LLC filed voluntary petitions on July 22 in the U.S. Bankruptcy Court for the District of New Jersey, according to the court docket. Poolin’s petition lists an estimated 10,001 to 25,000 creditors, assets of between $1 million and $10 million, and liabilities of between $100 million and $500 million.
A declaration from Chief Restructuring Officer Michael DuFrayne puts the debtors’ prepetition obligations at about $173.1 million. Roughly $163.7 million of that amount consists of unsecured IOUs issued to Poolin Wallet customers after the company suspended withdrawals during the 2022 cryptocurrency-market downturn.
The bankruptcy is intended to facilitate a court-supervised sale rather than reorganize Poolin as an operating business. Lonestar Dream stopped mining and hosting operations at its Pyote and Tarbush sites on July 10, retaining only a limited workforce to secure the properties and support the sale process.
The debtors have entered separate asset-purchase agreements with Thor CALAP LLC, which offered $15 million for the Pyote property and associated power rights and equipment, and $37 million for the Tarbush power rights and equipment. The Tarbush transaction excludes the site’s surface-use agreement, according to the Chapter 11 declaration.
Thor’s combined $52 million offer will serve as the stalking-horse bid, establishing a floor for competing offers under Section 363 of the U.S. Bankruptcy Code. The agreements remain subject to higher bids and court approval, and each site may be sold separately.
The proposed sale follows a three-month marketing campaign that contacted more than 335 potential buyers and investors, with an emphasis on AI and high-performance computing operators, hyperscalers, real estate investment trusts, private-equity firms and cryptocurrency miners. The process produced 28 nondisclosure agreements and seven letters of intent, including bids for individual sites and the combined portfolio.
Poolin said demand for AI infrastructure could increase the value of the sites’ power and electrical equipment, even though its own bitcoin mining and hosting operations were unprofitable. Lonestar Dream and Lonestar Taproot recorded cumulative losses of approximately $45.9 million since their formation, the declaration said.
Poolin was founded in China in 2017 by Zhibiao “Kevin” Pan, Fa Zhu and Tianzhao Li. It expanded rapidly and was regarded as the world’s largest cryptocurrency mining pool by September 2019. The company also developed Poolin Wallet, which allowed users to borrow the stablecoin USDT against cryptocurrency collateral and later offered interest-bearing deposit products.
That model came under pressure after China prohibited bitcoin mining in 2021 and cryptocurrency prices fell sharply the following year. Poolin transferred collateral associated with its wallet customers to Antalpha Technologies and borrowed about $213 million against cryptocurrency then valued at approximately $355.8 million, according to the court declaration.
Poolin used the proceeds for purposes including development of the Texas sites, mining-machine purchases, customer withdrawals, interest payments and operating expenses. As the market continued to fall, Poolin Wallet suspended withdrawals in September 2022 and issued IOU tokens representing customers’ frozen balances.
Around 11,700 wallet customers held balances exceeding $100 when approximately $163.7 million of IOUs were issued. Antalpha subsequently liquidated Poolin’s collateral in November 2022, when management estimated that approximately $260 million was owed against digital assets then worth about $265 million.
Poolin has not operated in the ordinary course since 2022. The Singapore parent’s remaining assets include approximately $1.2 million held in a New Jersey bank account, an office lease and an intercompany claim. Certain wallet holders have also filed legal claims against the debtors in the U.S. and Singapore.
Poolin’s attempt to rebuild around U.S. mining encountered further difficulties. The company evaluated more than 30 locations before choosing the Pyote and Tarbush sites in 2021. Early discussions with Texas-New Mexico Power indicated that as much as 600 megawatts might eventually be allocated, but the sites initially received only 100 MW.
Expecting the larger allocation, the debtors ordered more mining equipment than the sites could accommodate and later sold surplus machines at discounts. Unaudited records show about $8.8 million of equipment-sale losses from fiscal 2023 through fiscal 2025. Lonestar Taproot reported a net book value of $41.7 million for its property, plant and equipment as of May.
The Texas business was previously the subject of a proposed $49 million acquisition by China Green Agriculture, announced in December 2023 and reported by TheEnergyMag in 2024. The deal was still described as pending in China Green Agriculture’s fiscal 2024 annual report and ultimately did not transfer ownership; Pan remained Lonestar Dream’s sole shareholder when the bankruptcy was filed.
The debtors said they expect the current auction to produce a distribution for unsecured creditors. The eventual recovery, including for Poolin Wallet customers, will depend on competing bids, sale expenses, administrative costs and court approval of a liquidation plan.
