Nearly four years after Poolin halted customer withdrawals, the one-time largest Bitcoin mining pool has filed for Chapter 11 bankruptcy protection in New Jersey. Two U.S.-based affiliates joined the filing, while the company simultaneously outlined plans to auction two West Texas mining facilities with a combined opening bid of $52 million.

According to the original report, court filings reveal total debts of approximately $173.1 million. The vast majority—$163.7 million—comes in the form of IOUs issued to Poolin Wallet customers after the platform froze withdrawals in 2022. These IOUs now sit at the center of creditor recoveries, which will depend entirely on the auction outcome and court approval.

Poolin launched in 2017 and briefly ranked as the world’s largest Bitcoin mining pool by hashrate in 2019, at a time when its dominance reflected the first wave of institutional-scale mining operations. Unlike most mining pools that simply distribute block rewards, the platform offered a wallet service that held user funds directly. That structure turned a hashrate cooperative into something closer to a bank—without the regulatory backstops that protect depositors.

When crypto credit markets seized up in late 2022, Poolin froze redemptions alongside the cascading failures of lenders like Celsius and BlockFi. It never fully reopened withdrawals, instead issuing IOUs that many customers viewed as illiquid promises. Those IOUs now make up nearly 95% of the liabilities listed in the Chapter 11 filing, effectively converting retail mining participants into unsecured creditors of a distressed corporate entity.

The two West Texas sites—part of a region that has attracted mining firms for its low-cost power—carry a $52 million opening bid, less than a third of total debts. Mining infrastructure valuations, however, are highly sensitive to Bitcoin’s price, energy costs, and network difficulty. If the auction draws limited interest or final bids fall short, customer recoveries could be minimal.

The sale arrives as a weekly tokenization roundup highlighted broader asset consolidation across the crypto sector, with M&A and settlement activity reshaping balance sheets. Yet Poolin’s fire sale of physical mining facilities represents a far less orderly process, testing whether distressed U.S. mining assets can still attract sufficient capital in a market dominated by well-funded public miners.

The bankruptcy court will have to determine how Poolin’s customer IOUs are classified—a decision that could set a precedent for other platforms that blended mining and custody services. Meanwhile, the US regulatory landscape continues to evolve. A landmark US crypto bill currently facing a Senate vote could reshape how crypto custodians are treated under federal law, and even the threat of new rules changes negotiating dynamics in bankruptcy court.

For Poolin’s IOU holders, the path forward remains uncertain. The auction’s final numbers will dictate recoveries, but the more troubling question is whether the industry has learned from structures that left customer funds tied up in operating entities. Four years after withdrawals stopped, the Chapter 11 filing crystallizes a lengthy limbo and forces a reckoning over how mining platforms should segregate user assets.

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