Lenders seizing pledged mining equipment start mining cryptocurrency themselves
The cryptocurrency mining equipment seized by lenders has reached such an amount that many of them are forced to connect the asics themselves and engage in mining bitcoins.
The level of debt of the mining industry reached $4 billion at the end of 2022, forcing the companies that provided loans against the equipment to be creative. The situation is also exacerbated by the fact that increased supply has caused the value of the devices to plummet.
Some of the returned devices are sitting in warehouses while their owners wait for their value to recover. However, some are trying to find alternative solutions. For example, NYDIG paid Greenidge not only for the equipment but also for the operation. As a result, the Greenidge miner became a hosting firm and NYDIG became a miner.
BlocksBridge spokesman Wolfie Zhao also confirmed what was happening, noting the difficulties faced by both creditors and debtors:
Companies that have a surplus of seized equipment are having to keep devices running in collateral to generate revenue.
Mason Jupp, one of Blockware Solutions' top executives, also notes lenders' growing interest in mining:
Companies that have provided collateralized equipment financing are now busy looking for hosting and low-cost energy sources. The bankruptcy of Core Scientific-level miners would lead to an even greater supply of equipment, lower prices, and a worsening situation for lenders.