Galaxy Digital has provided Rhodium, a Bitcoin miner, with a financing plan that includes either $30 million or 500 Bitcoin.
The financing options from Galaxy Digital, a blockchain firm headed by Mike Novogratz, are included in the proposal that was approved on Friday. Galaxy Digital has provided Rhodium with the option to obtain a $30 million loan at an annual interest rate of 14.5% or 500 Bitcoin at an interest rate of 9.5%. Repayment of the Bitcoin loan in US dollars is the responsibility of Bitcoin miner Rhodium, in accordance with the market exchange rates in effect at the time of repayment.
The Texas-based miner, which filed for bankruptcy on August 24, disclosed a total debt of $100M and assets that ranged from $100M to $500M. Six subsidiaries have also participated in the filing: Jordan HPC, Rhodium Encore, Rhodium JV, Rhodium 2.0, Rhodium 10MW, and Rhodium 30MW. The primary cause of Rhodium’s financial difficulties was its fraught relationship with its landlord and power supplier, Whinstone.
The Bitcoin miner Rhodiums has filed for bankruptcy, following a history of financial difficulties. The company defaulted on a $54 million loan in July, prior to receiving a $78 million loan increase.
The recent Bitcoin halving event and the increasing cost of electricity have significantly reduced margins, exacerbating the broader trend that is causing cryptocurrency miners to struggle. Rhodiums’ struggles are a key component of this trend. Rival Riot Platforms has initiated litigation against Rhodium owing more than $26 million in outstanding fees.
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