In the District of Nevada of the U.S. Bankruptcy Court, Cash Cloud, the company that runs Coin Cloud digital currency ATMs in Brazil and the United States, has filed for Chapter 11 bankruptcy.
“We are announcing today that our company has filed for Chapter 11 reorganization,” Coin Cloud founder, CEO, and president Chris McAlary said. “This decision will allow us to rework our debt, protect the interests of our creditors, and emerge as a stronger, more financially stable company.”
According to McAlary, Coin Cloud was still “optimistic about the future of the cryptocurrency sector and our part in growing it,” had the backing of its biggest creditors, and “remain operational for our going-forward hosts and customers.”
The firm has between 5,001 and 10,000 creditors, liabilities between $100 million and $500 million, and assets between $50 million and $100 million, according to a filing from February 7.
Genesis Global Capital, a division of the insolvent lending division of Digital Currency Group, is Cash Cloud’s largest creditor. Its unsecured claim against Genesis is worth over $108 million, greatly exceeding the next-largest claimant, who is due over $8 million.
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 to 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.
Since at least 2014, Coin Cloud has been a leader in its industry. In a blog post from January 2022, Coin Cloud claimed to have more than 1,100 ATMs at the time and to be “at a key period in the company’s hyper-growth.” In the second half of 2022, the market for Bitcoin ATMs saw a significant decline. Additionally, in certain locations, Bitcoin has been added to already-existing ATMs, competing with ATMs made specifically for cryptocurrencies.
According to Coin Cloud’s website, it has more than 5,000 ATMs that support more than 40 cryptocurrencies. When Coin Cloud had 4,826 ATMs, almost all of which were in the United States, it was rated second globally in terms of the number of ATMs.
The team “made substantial expense cutbacks to response to market problems in order to sustain the company’s profitability,” according to McAlary’s statement.
He said that all of its affiliated companies, including those in Brazil, are not undertaking any corporate reorganization and are continuing to run normally.