Poolin's Bankruptcy: How a Bitcoin Mining Giant Became a $163M IOU Trap

Poolin Technology, which once controlled nearly a fifth of Bitcoin's global hashrate, has filed for Chapter 11 bankruptcy in New Jersey after its Texas mining operations shut down on 10 July. That's not a quiet corporate shuffle—it's the wreckage of what was genuinely one of the world's largest bitcoin mining pools, complete with $173.1 million in debts and approximately 11,700 customers holding worthless promissory notes worth $163.7 million.

The company started in Beijing in 2017, founded by Zhibiao "Kevin" Pan alongside Fa Zhu and Tianzhao Li, all veterans from Bitmain. For a few years it looked like the dream story: dominant mining pool, expanding into infrastructure, launching Poolin Wallet to offer lending and yield-bearing accounts. Then it all imploded.

The catastrophe began in 2022. Market turmoil exposed something the company had buried: a wallet service haemorrhaging money. Users started complaining about withdrawal delays on Telegram in late 2022 as the wider crypto industry faced a liquidity crisis. Kevin Pan admitted via WeChat post that Poolin was "facing liquidity problems," though he swore user funds were safe. By September 2022, the wallet suspended withdrawals entirely. The company issued approximately $163.7 million in IOU tokens to around 11,700 customers—basically promissory notes to buy time. Those IOUs were never redeemed. Three-and-a-half years later, they're still worthless.

The damage wasn't from mining. Mining would have been fine. The damage came from accepting customer deposits, letting people borrow against collateral, and paying yield rates that required leveraging customer assets into increasingly risky positions. That's the wallet business, and it killed the whole company.

Then came Texas. Poolin's pivot toward mining infrastructure in West Texas looked like a recovery plan. It wasn't. Lower-than-expected power allocations, equipment overorders, and $8.8 million in hardware sales losses between 2023 and 2025 turned the expansion into a capital drain. The company ended up with illiquid assets and no path back to anything resembling profitability.

So instead of restructuring to operate again, Poolin is using Chapter 11 to sell off what's left. Chief Restructuring Officer Michael DuFrayne pegged prepetition obligations at $173.1 million. The company has signed an asset purchase agreement with Thor CALAP LLC, which is the stalking horse bidder. That opening bid values the portfolio at $52 million: $15 million for the Pyote property with its power rights and equipment, $37 million for Tarbush's power rights and equipment. That's 32 cents on the dollar of total unsecured debt, before administrative expenses and priority claims get their cut.

The court-supervised auction for the Texas sites should conclude this year. Even at the stalking horse bid, proceeds will cover less than one-third of what the wallet users are owed. Those 11,700 people who froze their assets four years ago? Bankruptcy recovery might yield pennies on the dollar.

This is what happens when centralized crypto platforms promise yield in leveraged financial ecosystems and nobody enforces custody standards. Counterparty risk isn't theoretical.

Source & further reading:

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• Democratizing weather derivatives through tokenization could be crypto's most important real-world use case — CoinDesk
• Robinhood Chain's real-world assets jump fivefold as tokenized stocks start trading in bigger size — CoinDesk
• Senate Dems should accept the victory they won on Trump's crypto limits: White House — CoinDesk
• Sam Altman-backed World Network secures $52.5 million in fresh funding to fight online AI deepfakes — CoinDesk