Galaxy

Bitcoin

Rhodium Encore LLC, a Bitcoin mining company that filed for bankruptcy in August 2024, has received court approval for an unprecedented financing arrangement. The company has been granted the option to borrow funds in either U.S. dollars or Bitcoin, a rare occurrence in Chapter 11 bankruptcy cases.
Galaxy Digital, led by Mike Novogratz, offered Rhodium a choice between a $30 million cash loan with a 14.5% interest rate or 500 Bitcoin at a 9.5% interest rate. While the Bitcoin loan offers a lower interest rate, it comes with the inherent risk of Bitcoin's price volatility, which could significantly impact Rhodium's ability to repay the loan. This innovative approach to bankruptcy financing reflects the growing integration of cryptocurrency into traditional financial systems, although it also underscores the risks associated with the volatile nature of digital assets. The court's approval of this loan structure sets a precedent for how crypto-related companies might navigate financial distress in the future.
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Bankrupt Bitcoin Miner Rhodium Gets Court Approval for Unique Financing

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