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Crypto miner Marathon is not looking to buy any assets from bankrupt hosting provider Compute North, after considering a bid for a stake in the 280-megawatt wind power facility in Texas where it runs a large portion of its machines.

“We were prepared to bid on the King Mountain asset … in order to protect our interests if necessary — which in the end it wasn’t,” Marathon CEO Fred Thiel told The Block, referring to Compute North’s 50% stake in the joint venture with energy provider NextEra Energy.

Compute North agreed to sell its share of the partnership to US Data King Mountain in an auction on Nov. 15, according to an order approving the sale filed in bankruptcy court. That company is a subsidiary of data center developer US Bitcoin Corp, Thiel said.

“We wanted to make sure a competitor did not win the bid,” he also said. Thiel’s comments to The Block followed a report by Bloomberg, which said Marathon was mulling a bid on Compute North and had hired outside experts to advise on its exposure to the bankrupt hosting provider. 

Even as companies like DCG’s Foundry and mining company Crusoe buy up some of Compute North’s assets, Marathon appears unlikely to follow suit.

“We’re not interested in buying any of their sites and those have all been sold at this point, I think,” Thiel said. “And other than that, I don’t think there are a whole lot of assets that are worth looking at from our side.”

That’s not to say that the company would never consider buying up any distressed assets, according to Thiel. “If the right opportunities arise we’re obviously going to look at things,” he said.

Looking for profits

Marathon invested $31.3 million into Compute North. Its exposure to the bankrupt firm also included $50 million in operating deposits, of which $22 million of the remaining are likely fully recoverable as deposits and $8 million have already been written off, the company said this week in its November operational update.

Unlike other bitcoin miners, Marathon runs a more asset-light model, meaning that it doesn’t own its own infrastructure, instead contracting with hosting providers. Earlier this year it moved a large portion of its fleet from Montana into the recently energized King Mountain site and has been quickly ramping up production, especially since late September.

The broader industry is struggling with decreased profitability driven in part by bitcoin pricing and high energy costs and cash-strapped companies like Argo Blockchain have sold off thousands of machines.

Last month, Marathon mined 472 BTC, down 23.3% from October.

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