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
Are Stay Interviews the Key to Retaining Top Talent?
Retaining top talent continues to be one of the greatest challenges facing employers today. Even in an employer’s market, the loss of a key employee can disrupt operations and result in significant costs. While compensation plays a role, long-term retention often depends on workplace culture, communication, and employee engagement. One increasingly popular strategy for improving […]
Author: Angela A. Turiano
Why Secured Transactions Are Important
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Author: Dan Brecher
Don’t Cash a “Paid in Full” Check Without Understanding the Legal Implications
Cashing a check marked “paid in full” can be a risky endeavor, particularly if you don’t fully understanding the legal implications. If you are owed more than the amount of the check you accept and deposit, you may waive your right to collect the full disputed amount. That is why you should consider either rejecting […]
Author: Dan Brecher
Changes to Qualified Small Business Stock Will Benefit Startup Founders and Investors
The One Big Beautiful Bill Act of 2025 (OBBBA) significantly impacts federal taxes, credits, and deductions. A key change relating to Qualified Small Business Stock (QSBS) allows greater tax-free gains for investments in startups and other qualifying small businesses. Company founders and other investors should understand how the enhanced tax strategy works or risk missing […]
Author: Dan Brecher
Corporate Consolidation and Antitrust Issues in Mergers
Corporate consolidation involves two or more businesses merging to become a single larger entity. The result is often a stronger and more competitive company that can better navigate today’s competitive marketplace. What Is Corporate Consolidation? Corporate consolidation closely resembles a basic merger transaction. The primary difference is that a consolidation creates an entirely new business […]
Author: Dan Brecher
What is Business Law and Why Is it Important?
Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]
Author: Dan Brecher
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.