Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Bitcoin Company Files For Bankruptcy Protection
Author: Joel R. Glucksman
Date: November 15, 2013
Key Contacts
Back
Only three months after its inception, Alydian Inc., a provider of Bitcoin mining solutions, has filed for protection under Chapter 11 of the bankruptcy law.
The company – which is a unit of Bitcoin start-up and promoter CoinLab, Inc. – filed bankruptcy proceedings in the U.S. Bankruptcy Court in Seattle. It listed less than $50,000 in assets. Alydian owes a staggering $3 million to New Zealand’s XRay Holdings LLC, $600,000 to CoinLab, and $40,000 to Bitcoin Foundation chairman and CoinLab owner Peter Vessenes, according to The Wall Street Journal.
Alydian is CoinLab’s first incubator company that enables customers to mine Bitcoins without having to operate their own mining equipment. When CoinLab unveiled the unit in August, it said that the company would help to revolutionize the industry and enable “non-technical” consumers interested in the currency to mine with ease and efficiency.
“Alydian has developed an enterprise-scale Bitcoin mining system over the past year and we are excited to announce our capabilities today,” said Alydian CEO Hans Olsen. “The system, based on our first generation 65 nm custom ASIC technology will enable non-technical customers to participate in terahash and petahash-scale Bitcoin mining without worry or technical expertise. Alydian will begin at-scale operation and hosting in late August.”
Both Alydian and Mr. Vessenes, who signed the bankruptcy petition, declined to comment on the proceedings or provide details on how the company plans to repay its debt.
The virtual currency Bitcoins has gained popularity in recent months, but has raised a number of questions about how the currency – which has no ties to government, financial institutions, or investment houses – should be treated for tax purposes. Because Bitcoins are not recognized as a legitimate currency by any governing body, but are increasingly being used for real transactions, federal authorities are scrutinizing the virtual currency more closely.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
SPACs Are Back, What You Need to Know
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Author: Dan Brecher
Short Form Merger: Streamlining the Process for Businesses
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Author: Dan Brecher
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Common Causes of Partnership Disputes and How to Resolve Them
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
Businesses Are Facing Financial Headwinds—A Practical Guide
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
President Trump's Termination of Member Gwynne Wilcox
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Author: Matthew F. Mimnaugh
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.