Poolin Technology Pte. Ltd., once a prominent Bitcoin mining pool operator, along with its U.S. affiliates Lonestar Dream Inc. and Lonestar Taproot LLC, has filed for Chapter 11 bankruptcy. The filing, made in the U.S. Bankruptcy Court for the District of New Jersey on July 22, reveals a substantial financial deficit, with prepetition obligations exceeding $100 million against assets valued at less than $10 million. This significant gap raises concerns about the recovery prospects for approximately 11,700 wallet holders who are owed $163.7 million in unpaid IOU tokens.
The bankruptcy proceedings stem from Poolin’s decision to freeze withdrawals for its Wallet and Pool Account users in September 2022, citing liquidity issues exacerbated by the broader crypto market downturn that year. Rather than returning customer funds, the company issued IOU tokens, which have not been repaid. According to a court declaration from Chief Restructuring Officer Michael DuFrayne, these IOU debts amount to $163.7 million.
Asset Sale and Insufficient Bid
As part of the restructuring process, Poolin’s Texas mining and hosting operations, managed by Lonestar Dream, ceased operations entirely on July 10. Thor CALAP LLC has submitted a $52 million stalking-horse bid for these West Texas sites. A stalking-horse bid serves as an initial offer that sets a minimum price for a court-supervised sale, requiring any subsequent bids to exceed this amount. However, this bid specifically covers only the physical mining infrastructure and does not address the frozen wallet balances. The amount is also considerably less than the total sum owed to users.
Further compounding the financial challenges, the Texas units incurred approximately $45.9 million in losses since their inception. An additional $8.8 million in losses were recorded from the discounted sale of equipment between fiscal years 2023 and 2025.
Uncertain Recovery
The recovery for the 11,700 IOU holders is now largely dependent on the outcome of the auction for the Texas assets, a process that occurs more than three years after their withdrawals were initially frozen. Chapter 11 bankruptcy is a U.S. legal framework that allows a company to continue operating under court supervision while it reorganizes its debts or sells off assets. Poolin, founded in Beijing in 2017 by veterans of Bitmain, once controlled nearly a fifth of the global Bitcoin network’s hashrate. The company later expanded into crypto lending and interest-bearing accounts through its Poolin Wallet product. The current financial distress and asset sale underscore the uncertainties surrounding the full repayment of customer debts, with the final recovery amount remaining unclear.
Why This Matters
The materials describe a narrow update: Poolin Technology Pte. The final amount recovered from the auction of Poolin’s Texas sites.
Broader Context
Source materials place the factual news in this context: Poolin was founded in Beijing in 2017 by Zhibiao “Kevin” Pan, along with Fa Zhu and Tianzhao Li, all veterans of mining-hardware maker Bitmain.
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