Bitcoin miner Iris Energy faces $103M default claim from creditors

The company is facing a cash flow crisis due to tough market conditions.

According to a new filing with the United States Securities and Exchange Commission on Monday, Bitcoin (BTC) miner Iris Energy says it has received a default notice from mining rig manufacturer Bitmain Technologies.

The notice alleged that Iris Energy failed to “engage in good faith restructuring discussions” for certain principal payments due on Nov. 8. Additionally, Iris Energy received a separate notice last week from creditors alleging that it “failed to maintain sufficient insurance” and would constitute a default if not remedied within 10 days. 

Headquartered in Australia, Iris Energy is known for operating mainly Canadian Bitcoin mining centers that fully utilize renewable energy. In October, the company had an average mining hash rate of 3.9 EH/s, representing approximately 1.5% of the Bitcoin network’s mining capacity. 

As told by Iris Energy, the three debt facilities in dispute are $1 million, $32 million and $71 million worth of equipment financing loans secured by 0.2 exahash per second (EH/s), 1.6 EH/s, and 2.0 EH/s of Bitcoin miners. The firm says that 2.4 EH/s of miners and all of its data center capacity and development pipeline are unaffected by the notice:

“The lender to each Non-Recourse SPV has no recourse to, and no cross-collateralization with respect to, assets of the Company or any of its other subsidiaries pursuant to the terms of the Facilities.”

It appears that a combination of high electricity costs, lower Bitcoin prices, and increasing network difficulty has caused the firm to fall on hard times. Despite having $53 million in cash and generating over $8.7 million each month in revenue, the firm disclosed that its gross profit only amounts to $2 million monthly at current conditions, well below the monthly principal and interest payments of $7 million.