Poolin - Chapter 11 Case Summary

Business Description

• Poolin Technology Pte. Ltd. (“Poolin”), Lonestar Dream Inc. (“LSD”) and Lonestar Taproot LLC (“LST,” and collectively with Poolin and LSD, the “Debtors”) provide or historically provided cryptocurrency mining, wallet, hosting and related blockchain infrastructure services.
• Poolin is a private limited company registered under Singapore law. It historically operated under the Poolin brand in the People’s Republic of China through affiliated operating entities, including Beijing Satoshi Smart Technology Co. Ltd.
• Until closing its operations on July 10, 2026, LSD operated two core business segments:
  • Mining digital assets for its own account, referred to as “Self-Mining.”
  • Providing equipment-hosting services for large-scale mining customers using air-cooling, hydro-cooling and proprietary immersion-cooling systems.
• LST performs integrated business functions relating to the Debtors’ mining facilities, owns equipment used at the mining sites and is a party to the Amended SUA.

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Corporate History

Poolin’s Formation and Expansion

• Poolin was founded in November 2017 by Zhibiao (Kevin) Pan, Fa Zhu and Tianzhao Li. It subsequently became one of the world’s largest cryptocurrency mining pools and, by September 2019, was regarded as the world’s largest cryptocurrency mining pool.
• Strong retail demand for stablecoin loans collateralized by Bitcoin led Poolin to create the Poolin Wallet product in 2019.
• During the first half of 2020, Poolin planned to acquire mining machines at favorable prices in anticipation of a market recovery, expecting that Bitcoin produced by those machines could be used to repay loans and interest. Poolin expanded its mining operations during this period through sites in Sichuan, Xinjiang and Inner Mongolia.

Relocation to the United States

• After the Chinese government banned Bitcoin mining in May 2021, Poolin began evaluating opportunities to relocate or redeploy mining machines outside China.
• LSD and LST were formed as Delaware companies in late 2021. After evaluating more than 30 sites and substations nationwide, Mr. Pan selected property in West Texas for mining operations in September 2021.
• Poolin funded acquisition, construction and fit-out expenses for the mining sites through intercompany advances and equipment transfers, while Mr. Pan, LSD’s sole shareholder, contributed approximately $10 million of capital.
• Mining operations at the West Texas sites began during the second half of 2022.

Organizational Structure

• Poolin is governed by three directors: Kevin Pan, Kathy Zhang and Benjamin Thong.
• Kevin Pan is the sole director of LSD and LST. The Debtors’ officers are Kevin Pan, CEO; Kathy Zhang, COO; Pei Hsuan Chiu, CFO; and Michael DuFrayne, CRO.
• Mr. Pan owns Poolin and LSD; LSD is LST’s sole member.
• From March 2022 through December 2023, LST operated under a limited-liability-company partnership arrangement, with LSD and Bitmain serving as its operating partners. The declaration reports a capital contribution of approximately $34.4 million and reimbursement of approximately $24.1 million upon withdrawal; although it identifies Bitmain as the operating partner, it refers to the contribution as “Bitcoin’s,” apparently in error. The partnership sustained significant losses during its operating period and was terminated by agreement.

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Operations Overview

Poolin Wallet

• Through Poolin Wallet, users could pledge Bitcoin and receive USDT based on applicable pledge rates while paying interest on those borrowings. Poolin Wallet obtained USDT by pledging users’ cryptocurrency to institutional cryptocurrency lenders, with its business model depending in part on the spread between the lenders’ rates and the rates paid by Poolin Wallet users.
• Beginning in the second half of 2020, Poolin Wallet offered “time deposit” and “demand deposit” products carrying stated annual interest rates of approximately 2% to 8.8%.
• Cryptocurrency deposited through those products, together with other assets placed with Poolin Wallet, was substantially pledged to Tether International Limited to obtain USDT and support Poolin Wallet’s business.
• Poolin has not operated in the ordinary course since 2022. Its assets consist of approximately $1.2 million deposited in a New Jersey bank account, representing funds formerly held in the Mixin Wallet, an office-space lease in Lawrence, New Jersey, and an intercompany claim.

West Texas Mining Sites

• The Debtors’ mining operations were conducted at:
  • The 86.5-acre Pyote Site in Ward County, Texas. LST owns the site, which was subsequently reduced in size after approximately 62.5 acres were deeded back to prior owner Priority Power Management in settlement of a dispute.
  • The 64-acre Tarbush Site in Pecos County, Texas, which is subject to a surface use agreement with DBR Land LLC.
• LSD historically served as the principal customer-facing operating company for the Lonestar group. It managed hosting relationships, sold surplus equipment, recognized miscellaneous income and collected amounts owed from all sources.
• LST historically operated as a cost center for the mining sites. Its expenses included facility services, supplies, tools, equipment repairs and maintenance, equipment leases and security services.
• LST owns equipment and other assets at or associated with the mining sites, including power and property rights, buildings, improvements, substation infrastructure, tools and machinery. As of May 2026, the reported net book value of LST’s plant, property and equipment was $41.7 million.

Operational Wind-Down

• As of the July 22, 2026 Petition Date, LSD had substantially completed the wind-down of its operating business at both mining sites. Under an agreement with Elektron Energy and certain affiliates, LSD discontinued services and began disconnecting and removing Elektron’s equipment from the Debtors’ facilities; the Debtors filed a motion seeking approval of the related settlement agreement.
• The Debtors retained a limited workforce to preserve estate value; maintain the safety and security of the mining sites, equipment and other assets; support the marketing and sale process; and administer the Chapter 11 cases through confirmation of a plan.
• The Debtors do not intend to resume operations at the mining sites. Certain equipment, substation infrastructure and other Tarbush assets must be removed from the Tarbush Site to facilitate their sale.

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Prepetition Obligations

Unsecured Obligations

• The Debtors’ preliminary prepetition capital-structure summary, subject to further reconciliation through their schedules, statements and the claims process, lists the following obligations:
  • Unsecured Wallet Holder IOUs of $163,723,500.
  • Other unsecured debt of $4,467,600.
  • An unsecured shareholder loan of $4,258,600.
  • Trade creditor claims of $450,000.
  • Insurance premiums of $210,000.
  • Taxes payable of $91.

Surface Use Agreement

• The Tarbush Site was initially subject to a surface use agreement between LSD and DBR Land LLC effective Jan. 1, 2022. The agreement was amended in August 2024, with LST and DBR becoming the parties to the Amended SUA.
• DBR has a dispute with the Debtors under the Amended SUA concerning royalty payments.

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Events Leading to Bankruptcy

China Mining Ban and Poolin Wallet Liquidity Crisis

• The Chinese government’s May 2021 ban on Bitcoin mining significantly disrupted Poolin’s China-based operations. Poolin subsequently deregistered Beijing Satoshi Smart Technology Co. Ltd. and shut down its mainland China operations.
• Poolin’s books and records were incomplete following the sudden shutdown. The affiliated U.S. management team subsequently sought to reconstruct the books and records from available information.
• Cryptocurrency market conditions deteriorated materially by mid-2022. When Bitcoin’s price fell below approximately $20,000 in June 2022, Poolin’s collateral declined in value and Poolin faced increasing margin calls from Tether.
• Poolin transferred substantially all cryptocurrency collateral associated with Poolin Wallet users’ time deposits, demand deposits and pledged borrowing collateral to Antalpha Technologies Limited to reduce its reliance on Tether.
• During summer 2022, Poolin borrowed approximately $213 million from Antalpha using collateral with a then-market value of approximately $355.8 million. Proceeds were used for purposes including the development and startup of LSD’s U.S. operations, interest payments, purchases of mining machines and other capital assets, customer withdrawals and ordinary business expenses.
• In September 2022, Poolin Wallet announced a liquidity crisis, suspended withdrawals and issued approximately $163.7 million of IOUs to Wallet Holders. At issuance, approximately 11,700 Wallet Holders had balances exceeding $100.
• Bitcoin fell below approximately $16,800 in November 2022 as several major cryptocurrency market participants suspended withdrawals or reorganized. Poolin could no longer sustain its business model and shut down its operations.
• Antalpha liquidated Poolin Wallet’s collateral in November 2022. Management estimates that Poolin then owed Antalpha approximately $260 million, collateralized by approximately $265 million of digital currency assets.

U.S. Operational and Financial Challenges

• Early discussions with Texas New Mexico Power indicated that up to 600 MW would be allocated to the mining sites, but only 100 MW was initially allocated. In anticipation of receiving 600 MW, the Debtors overordered mining equipment, further straining working capital.
• The Debtors sold surplus equipment at discounted prices to address cash-flow losses. Their unaudited books reflect approximately $8.8 million of equipment-sale losses from fiscal 2023 through fiscal 2025.
• The Debtors cite industry challenges, Bitcoin price volatility, the pandemic, startup cost overruns and delays, and cross-border legal claims as factors contributing to their decision to cease mining operations and sell their assets.
• LSD and LST have not been profitable since their formation and have incurred approximately $45.9 million of cumulative losses. Capital sources for digital mining and hosting have evaporated, while business development has softened.
• Certain Wallet Holders have also filed legal claims against the Debtors in the United States and Singapore.

Restructuring and Marketing Process

• Michael DuFrayne and DuFrayne LLC were appointed on or around Nov. 14, 2025, to serve in the CRO role and implement an enterprise-wide restructuring initiative. DuFrayne LLC was subsequently retained on or around Feb. 3, 2026, as the Debtors’ investment banker in connection with a potential investment, financing or sale transaction.
• DuFrayne conducted a marketing process lasting more than three months and contacted more than 335 strategic, financial and hybrid parties, with an emphasis on AI/HPC data-center industry participants and cryptocurrency mining operators.
• The initial process produced 28 nondisclosure agreements and seven letters of intent:
  • Two for the Pyote assets.
  • Three for Tarbush’s power and equipment.
  • Two covering the combined assets, power and equipment of both sites.
• The Debtors also received three additional indications of interest in participating in the auctions.

Stalking Horse Transactions and Chapter 11 Filing

• On July 13, 2026, LSD and LST signed letters of intent effective July 10 with Thor CALAP LLC for the purchase of the Pyote Site and associated power rights, equipment and other assets, as well as the power rights, equipment and other assets associated with the Tarbush Site, excluding the Amended SUA.
• Thor offered $15 million for the Pyote assets and $37 million for the Tarbush assets, representing $52 million in aggregate if both separate transactions close. The Debtors characterized the offers as the highest or otherwise best offers.
• On July 22, 2026, the Debtors and Thor entered into separate asset purchase agreements for the Pyote and Tarbush assets. Together, the agreements contemplate the sale of substantially all of the Debtors’ assets, although each represents a separate and independent transaction proceeding on its own terms.
• The Debtors intend to market the assets as a combined package or in separate lots, depending on which structure produces the highest or otherwise best offer.
• Management believes the shift in AI/HPC computing demand supports targeting the Debtors’ energy capabilities and assets to AI/HPC users to generate the highest value for the assets.
• The Debtors filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the District of New Jersey on July 22, 2026, to implement an orderly, value-maximizing sale process, wind down operations and pursue confirmation of a liquidating plan. The Debtors stated that they believe the sale process will yield a substantial dividend to creditors upon confirmation of a liquidating plan.