Key takeaways:
- Coin Cloud, a company that operates digital money ATMs in the US and Brazil, has declared chapter 11 bankruptcy in the District of Nevada of the US Bankruptcy Court.
- The company owes a $100 million uncollateralized loan to the insolvent cryptocurrency broker Genesis, making it the largest identified creditor.
One of the biggest Bitcoin ATM providers in the US and Brazil, Coin Cloud, filed for bankruptcy on January 8 and left behind liabilities totaling around $500 million. Coin Cloud advertises on its website that it has more than 5,000 ATMs that accept more than 40 different cryptocurrencies.
Launched in 2014 by the current CEO Chris McAlary, Coin Cloud was among the first significant players in the cryptocurrency ATM market. Coin Cloud is currently suffering as a result of the crypto winter and the failure of important businesses like FTX, Alameda Research, and Blockfi, among others.
The majority of Coin Cloud’s 4,826 ATMs, which made it the second-largest crypto ATM network in the world, were located in the United States.
Chris McAlary, the founder, CEO, and president of Coin Cloud, said:
“Our company has filed for Chapter 11 reorganisation. By making this choice, we will be able to restructure our debt, safeguard the interests of our creditors, and grow into a stronger, more stable business.”
A document submitted to the U.S. Bankruptcy Court for the District of Nevada dated Feb. 7.details the Las Vegas-based company’s assets, which range between $50 million and $100 million, and its potential creditors, who might total 10,000.
Bloomberg stated on November 22 that Coin Cloud had obtained an unsecured loan from Genesis of roughly $100 million and was at the time in discussions with Genesis seeking “extra money” to assist it restructure a debt of about $125 million, citing anonymous sources. It is unclear whether Coin Cloud received further credit from Genesis at that time given it was already struggling financially.
However, compared to the amount owing to Genesis, Cole Kepro, its second-largest creditor, is only owed about $8.5 million.
Coin Cloud ran its own non-custodial wallet service in addition to its primary ATM business. This service included interfaces with its physical network and allowed users to exchange their tokens for cash.
