Rhodium Secures $30M Bitcoin Loan Amid Bankruptcy

Bankrupt Bitcoin mining company Rhodium Enterprises has secured a significant lifeline in the form of a 500 BTC loan, valued at approximately $30 million, from Galaxy Digital. 

This unusual financing arrangement comes as Rhodium navigates Chapter 11 bankruptcy proceedings, having filed for protection in the Southern District of Texas on August 24, 2024. The company reported liabilities ranging from $50 million to $100 million, while its assets are estimated between $100 million and $500 million.

Under the terms of the loan, Rhodium has two repayment options: it can either repay in U.S. dollars at an annual interest rate of 14.5% or choose to repay in Bitcoin at a reduced rate of 9.5%. This flexible repayment structure reflects the ongoing challenges faced by cryptocurrency miners, particularly in light of declining Bitcoin prices and rising operational costs exacerbated by the recent halving event in April.

Rhodium's bankruptcy filing follows its inability to meet a $54 million loan repayment due in July 2024, which contributed to the decision to restructure its debts. The company has engaged legal and financial advisors to assist in its reorganization efforts, aiming to stabilize its operations amid a turbulent market for Bitcoin mining.