Last updated on January 6th, 2015 at 11:50 pm
Coin Fire learned last week that CoinTerra was on the brink of being insolvent and bankrupt from sources familiar with the matter, but was unable to confirm with further inside sources until the staff had returned from the holidays.
Earlier this afternoon, an employee of CoinTerra spoke with Coin Fire under the condition that anonymity be paramount out of fear for their job and any potential severance in the event of liquidation by the creditors.
We asked the unnamed source at CoinTerra to confirm early reports that the company was struggling to stay afloat and that the offices in Austin would be closed. The CoinTerra source stated,
Yes, the rumors and rumblings on the Internet and reddit are true. CoinTerra is on the verge of falling apart. Before going to our holiday break, the talk inside our company was that we would be collapsing, but after coming back from our holiday break, apparently the company attorneys have found a potential solution but it will likely result in us declaring a bankruptcy. I’m not familiar with the intimate details, but I do know we may not have jobs here much longer.
Coin Fire received information on Christmas Eve from a source who claimed to be familiar with the situation. This source told us that they had received good information the company was on the verge of bankruptcy. Upon following up with further sources familiar with the company’s current notes and financials, we received a second confirmation from another unnamed source who told Coin Fire,
CoinTerra is making every reasonable attempt to continue operations in a way that doesn’t have a major impact on our customers. That said, some customers might notice cloud mining payments are late or not happening. We hope to resolve this issue with our legal team soon.
Minutes before going to press with this story, a reddit user named Freop posted that they had received an email from CoinTerra stating they would not be making the weekly cloud mining payment. At the time of going to press, Coin Fire has been unable to verify the authenticity of the email and has requested an official on-the-record statement from CoinTerra. We have not yet obtained one.
The alleged email stated:
Thank you for contacting CoinTerra.
Our legal department has provided the following:
“The company has defaulted on its secured notes. The Note Holders have senior, secured and, we believe, perfected liens on all of CoinTerra’s assets, including servers. We have proposed a plan to the Note Holders. However, at this point we do not know how they are going to react to our proposal. The Note Holders are evaluating their options. Until this is resolved, CoinTerra will be unable to make further payments.”
What this means is that we cannot issue any payments to customers at this time. Rest assured we will let you know if this situation changes or if there are any relevant new developments but, for now, we have no further information.
Laura CoinTerra Support Team
We will continue to follow this story.