Great North Data, a crypto startup that ventures in Bitcoin mining and AI processing with enormous business support from the Canadian government, has filed for bankruptcy.
The firm reported having only 4.6 million Canadian dollars( US$3.5 million) in assets compared to CA$13.2 million(US$10million) owed to creditors.
Great North Data carries out Bitcoin mining operations and also processes artificial intelligence algorithms in facilities based in Labrador City and Happy Valley-Goose Bay.
According to the bankruptcy claims, the firms owe several private companies as well as the federal and provincial governments. Among the government agencies owed some cash include the Atlantic Canada Opportunities Agency (ACOA) owed CA$281,675 and listed as an unsecured creditor.
ACOA was instrumental in the company’s startup, having provided CA$500,000 to the company as an unsecured loan/ unconditionally repayable contribution in late 2015. The ACOA is tasked with stimulating economic growth in Atlantic Canada by assisting businesses to become more competitive, innovative, and productive. That’s the main reason why it offered such a massive loan to Great North Data with no security.
Great North Data also owes CA$313, 718 to the Business Investment Corporation of the provincial Newfoundland and Labrador government. From the report, the amount is secured with Great North Data assets, which include land, equipment, and buildings, and arise from a previous loan of CA$420,000.
The firm also owes CA$316, 477 to Newfoundland and Labrador Hydro in the unsecured power bill. The Business Development Bank of Canada is also owed CA$225, 000 in unsecured credit.
Why File for Bankruptcy?
In the report, the company did not provide the real reason behind the bankruptcy claims. However, the report indicated that Great North Data faced difficulties in carrying out its operations due to complaints from the public concerning high power usage, noise pollution, and failure to offer jobs to the locals.
Commenting on the bankruptcy claim, Great North Data CEO James Goodwin stated:
“We are where we are because that’s where the power is. The only other option is to shut down the business.”
Another possible reason for the closure of operations is mining difficulties and dwindling Bitcoin prices. The fact that an established Bitcoin miner files for bankruptcy should send shock waves across the crypto space regarding falling Bitcoin prices.
What You Should Know About Great North Data
While the company has shut its website following the bankruptcy claim, it’s still possible to trace information relating to the company. The startup was established in 2013 and developed from a basement startup to a major provider crypto startup in Atlantic Canada, supported by the Canadian government.
Great North Data has also invested close to $6 million in Bitcoin mining through the purchase of equipment and paying contractors. The company employed 25 full-time and 4-part time staff and had projected $6 million in profits by the end of 2019.