Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Bitcoin Mining Manufacturer Files for Bankruptcy
Authors: Joel R. Glucksman, Donald Scarinci
Date: June 17, 2014
Key Contacts
Donald Scarinci
Firm Managing Partner
201-896-4100 dscarinci@sh-law.comBack
HashFast, a manufacturer of bitcoin mining equipment, has filed for protection under Chapter 11 of the bankruptcy law, according to CoinDesk. A creditor, Liquidbits, had filed an involuntary Chapter 7 bankruptcy against HashFast, forcing it to request a conversion to a voluntary Chapter 11 reorganization proceeding.
U.S. Bankruptcy Judge Dennis Montali granted HashFast’s request June 7, after coming close to appointing a Chapter 7 trustee at creditor LiquidBits’ request, the news source reported. The latter firm alleged that HashFast failed to make good on a $6 million order. Just one month ago, the company laid off half of its workforce and issued a public denial that it was filing for bankruptcy.
In a blog post, HashFast explained that it would be entering Chapter 11, and that it intends to reorganize in order to provide more value to its creditors than it would in a liquidation. Eduardo DeCastro, the CEO of the company, will be stepping down. Monica Hushen, HashFast CTO, will be handling business operations and bankruptcy matters. The company also announced that it had retained Katten Muchin Rosenman LLP as its bankruptcy council.
According to CryptoCoinsNews, HashFast’s troubles began when its customers began demanding refunds, as the company’s hardware began lagging behind that of the competition. Bitcoin mining takes large amounts of processing power and electricity, and returns are cut in half regularly as a part of the currency’s algorithm, which mandates an asymptotical approach to 21 million bitcoins. This means that mining remains economically viable only if the currency continues to appreciate in value or the cost of mining technology continues to fall.
HashFast has cut its costs and intends to restructure to a more viable business strategy. Bitcoin mining can still be viable on a large scale, but it is yet to be seen whether HashFast will be.
If you have any questions about this post or would like to discuss your company’s creditors’ rights and bankruptcy matters , please contact me, Joel R. Glucksman at www.ScarinciHollenbeck.com.
- 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
New York NDA Requirements for Businesses
Non-disclosure agreements (NDAs) remain a critical tool for protecting sensitive business information. However, New York NDA requirements have evolved, and businesses must ensure these agreements are carefully drafted to remain enforceable. In a competitive market like New York City, NDAs are commonly used to protect proprietary information, client relationships, and strategic plans. At the same […]
Author: Dan Brecher
New Jersey Will Contest Grounds Explained
How Courts Evaluate Testamentary Capacity and Undue Influence Will contests in New Jersey are difficult to win, given the strong presumption that a properly executed will reflects the testator’s intent. However, challenges based on lack of testamentary capacity and undue influence remain common, particularly where there are concerns about mental capacity or the involvement of […]
Author: Marc J. Comer
Legal Issues Before Bringing on Investors
Bringing on outside investors can provide the capital and strategic support a business needs to grow. However, raising capital also introduces important legal, financial, and operational considerations. Before bringing on investors, businesses should address key legal issues to reduce risk, streamline investor due diligence, and position the company for long-term success. Early preparation signals that […]
Author: Dan Brecher
SECURE 2.0 RMD Planning Strategies
How the Updated Law Shapes Retirement and Estate Planning The SECURE 2.0 Act of 2022 materially reshapes the required minimum distribution (RMD) landscape, extending tax deferral opportunities while accelerating distribution requirements for many beneficiaries. For high-net-worth individuals and families, these changes are not merely technical. They require a reassessment of retirement income strategies, beneficiary planning, […]
Author: Marc J. Comer
Buying Commercial Property in New Jersey: Legal Guide for Small Businesses
Small businesses considering buying commercial property in New Jersey must evaluate a range of legal, financial, and operational factors. While ownership can offer long-term value and control, it also introduces significant risks if not properly structured. This guide outlines key considerations to help New Jersey business owners make informed decisions, minimize legal exposure, and successfully […]
Author: Robert L. Baker, Jr.
The SEC’s Latest Guidance on Applying Federal Securities Laws to Tokenized Securities
On January 28, 2026, staff of the U.S. Securities and Exchange Commission’s Divisions of Corporation Finance, Investment Management, and Trading and Markets issued a joint statement clarifying how existing federal securities laws apply to tokenized securities. The SEC’s “Statement on Tokenized Securities” does not establish new law, but it does provide greater clarity on the […]
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.