Bitcoin Mining Giant Poolin Files Bankruptcy With $163.7 Million in Frozen Customer Claims

Mining Pool Collapses Under Weight of Frozen Deposits

Poolin Technology, a Singapore-registered operation that once dominated Bitcoin mining, initiated Chapter 11 bankruptcy proceedings on July 22, according to filings in U.S. Bankruptcy Court for the District of New Jersey. The collapse represents a stunning decline for the company, which previously held roughly one-fifth of the network’s total hashrate at its peak. The underlying crisis began in September 2022, when the company abruptly halted withdrawal access for Poolin Wallet and Pool Account customers, citing liquidity pressures amid the year’s broader crypto market collapse.

Rather than repaying affected users, Poolin issued IOU tokens as temporary placeholders—a measure that became permanent. Those unredeemed claims now represent the bankruptcy filing’s largest liability, with approximately 11,700 wallet holders collectively owed $163.7 million, according to a court declaration from Chief Restructuring Officer Michael DuFrayne. The disparity between obligations and available resources is stark: court filings reveal total prepetition liabilities exceeding $100 million against assets valued at less than $10 million.

Asset Sales Insufficient to Cover Customer Losses

To generate recovery funds for creditors, Poolin is liquidating its remaining mining infrastructure. The company’s Texas mining and hosting operations, operated through subsidiary Lonestar Dream Inc., ceased all activities on July 10 with no plans to resume. These facilities have consistently operated at a loss, accumulating approximately $45.9 million in losses since inception, compounded by an additional $8.8 million in losses from discounted equipment sales between fiscal 2023 and 2025.

A court-supervised auction process is now underway for Poolin’s two West Texas mining sites. Thor CALAP LLC has placed a $52 million stalking-horse bid—an opening offer that establishes a price floor for competitive bidding. However, this amount covers only physical mining equipment and falls far short of the $163.7 million owed to customers. The substantial gap suggests most IOU holders will experience significant recovery shortfalls, with final distributions determined by the bankruptcy process.

From Industry Prominence to Liquidation

Poolin’s rise and fall underscores the challenges facing centralized mining infrastructure during prolonged bear markets. Founded in Beijing in 2017 by Zhibiao “Kevin” Pan alongside co-founders Fa Zhu and Tianzhao Li—all experienced hardware engineers from Bitmain—the company rapidly scaled to become one of the world’s largest mining pools. The operation later expanded into cryptocurrency lending and deposit products through its Poolin Wallet service, attempting to diversify beyond mining pool operations.

The September 2022 withdrawal freeze, presented as a temporary liquidity measure, proved irreversible. Rather than restoring customer access during subsequent market recoveries, Poolin accumulated years of unpaid obligations before formally entering bankruptcy. This outcome highlights the structural risks inherent in centralized mining platforms, particularly when lacking transparent reserve verification or adequate capital buffers during market downturns.

Source: U.S. Bankruptcy Court for the District of New Jersey, via Decrypt. Not financial advice.