In the district of Nevada, the firm Coin Cloud Inc., which operates over 5000 automated teller machines (ATMs) in both the United States and Brazil, has submitted (1) a petition for protection under chapter 11 of the bankruptcy code.
According to the documents that have been filed with the court, Coin Cloud owes its creditors between $100 million and $500 million and has assets that range between $50 million to $ 100 Million .
The number of creditors is between 5,000 and 10,000. Genesis Global Trading, a DCG subsidiary, is Coin Cloud's largest creditor, with an outstanding claim of more than 108 million dollars.
Notably, Genesis Global Trading has recently applied for protection under chapter 11 of the bankruptcy code after being crippled by the bad debts of FTX and Voyager Digital in the previous year.
In the future, the firm plans to reorganize its business activities to serve the creditors' and shareholders' best interests by doing so under judicial control.
Chris McAlary, founder, CEO, and president of Coin Cloud said that as a result of this move, the firm would be able to reorganize its debt, safeguard the interests of its debtors, and arise as a larger and more financially stable entity.
Following a relief rally in January, many crypto currency traders have been taken aback by the revelation, which surprised them. Nevertheless, Circle CEO and Founder Jeremy D. Allaire had projected that numerous crypto currency firms are quietly bankrupt, and he cautioned traders to proceed with caution during this year's World Trade Organization conference.
As per Bloomberg (2), Coin Cloud has been seeking extra financial help from Genesis Global Trading even though the latter company was having trouble paying its creditors while Coin Cloud filed for bankruptcy.
Another Victim of Crypto Winter
The bankruptcy of Coin Cloud is a strong indicator that the bear market that began in 2022 may not be over in the crypto currency industry just yet. The price of Bitcoin and alternative crypto currencies might drop to levels not seen since early last year if a correction occurs.
In addition, there will be an increase in the pressure to sell as investors want to grab profits and escape the volatility and uncertainty.
The fact that a company established in 2014 has gone bankrupt after only eight years demonstrates the challenges that crypto enterprises must overcome to be profitable.
In addition, as a direct result of the crypto market meltdown that occurred in the second part of the previous year, Coin Cloud saw a significant slowdown in the expansion of its business operations.
Traditional financial institutions with ATMs widely dispersed across various places have entered the crypto currency industry, which is notable.
As a direct consequence, purpose-built crypto currency ATMs have been subjected to increasing competition during the early stages of their development, which has rendered them unable to fulfill their financial responsibilities.
In the meantime, according to the most recent statistics, the overall market value of crypto currencies has decreased by around 2 percent in the previous twenty-four hours to approximately $1.004 trillion.
The current price of Bitcoin, which is trading at $22,516, gives it a market domination of approximately 39.4 percent.