Following a lengthy silence in the media, CoinTerra CEO Ravi Iyengar has emerged on the offensive, seeking to clarify the current state of his bitcoin mining firm, one that has recently been rocked by questions about its solvency.
Speaking to CoinDesk as part of a new interview, Iyengar confirmed that the Austin-based bitcoin mining company is in default, and it is currently awaiting a decision from its secured note holders.
CoinTerra is in default on roughly $4.25m-worth of secured notes, according to Iyengar. The admission comes days after the firm became the target of a lawsuit filed by data center services provider C7 Data Centers. CoinTerra has launched a countersuit, contesting Utah-based C7’s allegations of unjust enrichment and breach of contract.
Iyengar asserted that a halt in bitcoin mining at C7’s data centers resulted in a default event for CoinTerra, telling CoinDesk:
“At this point in time, things are kind of frozen. Until the next steps are clear, you know, there’s not a whole lot progress we can make.”
The CEO declined to offer specifics on a potential deal, citing non-disclosure agreements.
Indications that CoinTerra was experiencing debt problems first emerged earlier this month. Iyengar said in an interview that situation has effectively left CoinTerra “frozen” as it pursues solutions with its debt holders.
Problems not anticipated
Complicating the company’s current situation is that CoinTerra began accepting preorders for its planned 16nm AIRE Miner in September.
Iyengar said that at the time CoinTerra didn’t foresee the problems it is currently experiencing today, arguing that his company’s fortunes shifted as the price of bitcoin fell over the course of 2014 and network difficulty climbed.
He explained:
“Things were going well. We had many different meetings, in terms of investment opportunities and all that, so there was no indication at that time whatsoever that things [would worsen].”
Throughout the interview, Iyengar strived to paint CoinTerra as the victim of larger market forces.
“Who would predict the downfall that bitcoin has taken, in terms of price and difficulty and all that?” he continued. “A lot of things have happened that were not foreseen.”
The legal complications, as well as the default, have put initiatives such as its next-generation mining ASICs in limbo, and Iyengar said that, like other parts of the business, its too early to suggest how that work might continue.
Awaiting debt decision
When asked about CoinTerra’s next move, Iyengar said that there are several factors, including the health and future of the bitcoin network itself, that will play into the final decision made by its debt holders.
Until then, Iyengar acknowledged, the company’s future remains uncertain.
He suggested that owners of the company’s debt are likely examining the current price of bitcoin – $182 at the time of writing – as well as any other variables as they weigh the plan put forward by CoinTerra, explaining:
“I’m sure the note holders are looking at everything, the situation in the market. So, it all depends on how they move.”
“It’s hard to predict,” he concluded.
Uncertainty visualization via Shutterstock